gst a leap forward - rsm global · 2020-01-03 · under the gst law, although there is a single...

GST - A LEAP FORWARD

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Table of Contents

Sr. No. Chapter

Section I Introduction

Section II What businesses need to know about the GST law?

Section III Major changes and current issues under GST

Section IV GST and Supply Chain

Section V Litigation under the GST law

1 Introduction 2

2 Chargeability 3

3 Registration Requirements 9

4 Time of Supply 12

5 Place of Supply 15

6 Value of Supply 28

7 Input Tax Credit (including ISD) 33

8 Imports and RCM 43

9 Exports and SEZ Supplies 47

10 Job Work 49

11 Documents and E-Way Bill 52

12 Returns, Payments and Refunds 65

13 Records and Audit related provisions 71

14 Anti-Profiteering Measure 74

15 GST Impact on Supply Chain 78

16 Advance Ruling 84

17 Penalties and Interest 87

18 Litigation under GST 91

19 Case Laws 93

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GST - A Leap Forward

Section I INTRODUCTION

The implementation of GST with effect from 1 July 2017 covering almost 1 crore tax filers,

(with an estimated annual tax collection of Rs. 10 lakh crores) has been undoubtedly the

most prolific indirect tax reform in India.

The government has given many relaxations and extensions to assessees for the purpose

of filing the returns. The challenges with the GSTN portal have also postponed invoice to

invoice matching and the filing of Form GSTR – 2. Currently, many industry

representations are still ongoing. Transitional credits, classification of goods and services,

place of supply, inadmissible tax credits and applicability of reverse charge are expected to

be a major area that would be subject to scrutiny by the department.

Most recently, e-way bills have been introduced and many states are also imposing e-way

bill requirements for intra state transactions.

While businesses were initially only looking at compliances under the GST law, the time is

now ripe for businesses to undertake radical redesigning of their business distribution

models and organizational processes. As the GST law and compliance procedures get

stabilized, the opportunities and challenges for businesses will now shift from compliance

to optimization, from tax incidence to tax exposure management. In Financial Year 2018 –

19, companies will take critical steps, leaps as well as bounds to realign their supply chain,

optimize their distribution and logistics network, streamline their ERP systems and look to

emerge as winners in the hypercompetitive world. The opportunities are limitless and

businesses need to start becoming proactive and look at GST as an enabler.

Admittedly, there have been challenges in obtaining refunds under the GST law. Various

issues such as jurisdiction of the refund sanctioning officers, technical glitches,

inadmissibility of claims and improper documentation have led to refunds being denied and

this has severely impacted the working capital of the taxpayers. However, a series of

proactive steps are being taken and it is being observed that in several cases, refund to the

extent of 90% of the claims are being credited to the bank accounts of the exporters.

Thus, we can see that GST poses certain challenges as well as opportunities for the

taxpayers. The teething challenges that companies faced in the initial years will streamline

and companies will be able to leverage the GST law more proactively in the ensuing years.

Chapter 1 Introduction

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2.1 Introduction

2.2 Taxable event under GST is ‘supply’ of goods or services or both

In this section, we give a short introduction about the various types of taxes levied

and also discuss the taxable event under the GST law.

1. The taxable event under GST is ‘Supply’ of goods and services. The term

‘Supply’ is defined in an inclusive manner and includes any supply which is

made in the course and furtherance of business. Unless something is

specifically excluded from the meaning of ‘Supply,’ it would trigger tax

incidence under the GST law.

2. In the GST law, it is important to ascertain that whether a transaction is intra

state or inter-state. Such ascertainment would depend on the ‘location of

the supplier’ and the ‘place of supply’.

3. The term “location of supplier,” in this context, refers to

- where a supply is made from a place of business for which registration

has been obtained, the location of such place of business;

- where a supply is made from a place other than the place of business

for which registration has been obtained, that is to say, a fixed

establishment elsewhere, the location of such fixed establishment;

- where a supply is made from more than one establishment, the

location of the establishment most directly concerned with the

provision of the supply;

- in absence of such places, the location of the usual place of residence

of the supplier.

4. The place of supply shall be determined in accordance with the IGST Act, 2017

and we have a separate section in our publication dealing with this aspect.

5. Where location of supplier and place of supply are in the same state, the

transaction is an intra state transaction. An intra state transaction attracts

two levies – Central GST (CGST), which is a central levy governed by Central

Chapter 2 Chargeability

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GSTlaw Act and State GST (SGST), which is governed by the respective state

GST law.

6. Where transactions occur within a UT, in addition to CGST, a levy known as UT

GST shall also be levied.

7. Any transaction which is not an intra state transaction is an inter-state

transaction and attracts Integrated GST.

As the taxable event under GST is that of supply of Goods / Services or both,

understanding the meaning of ‘Supply’ under GST law is very critical for analyzing

taxability of GST in a transaction. The definition of Supply under GST laws is an

inclusive definition, which is depicted below:

2.3

“Sup

ply”

Incl

udes

:

All forms of supply of goods / services such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business

Import of service for a consideration whether or not in the course or furtherance of business

Specific supply made or agreed to be made without consideration-Schedule 1

Import of services by a taxable person from a related person or from any of his other establishments outside India, in the course of furtherance of business

Permanent transfer / disposal of business assets where input tax credit has been availed on such assets

Supply of goods / services between related persons or between distinct taxable persons, when made in the course or furtherance of business (Except gift not exceeding Rs. 50,000/- in value in a financial year by employer to employee)

Supply of goods:

(a) By a principal to his agent where the agent undertakes to supply such goods on behalf of the principal, or

(b) By an agent to his principal where the agent undertakes to receive such goods on behalf of the principal



2.4 Supply of Goods, Supply of Services and Transactions which are not a ‘Supply’

Under the GST law, although there is a single taxable event – Supply, it is important

to determine whether a transaction is supply of goods or supply of services since

certain important aspects such as time of supply (when tax is to be paid), place of

supply and eligibility of credit in certain cases, depends on such categorization of

supplies. Transactions that are neither supply of goods nor supply of services are

specified in Schedule III to the CGST Act, 2017. Some of the relevant transactions

that are not a supply as per the said Schedule are:

- Services by an employee to the employer in the course of or in relation to his employment

- Services by any court or Tribunal established under any law for the time being in force.

- Sale of land and sale of building which is not under construction or for which the first occupation has already been made.

- Actionable claims, other than lottery, betting and gambling.

Following shall be deemed to be treated as supply of goods or services.

Supply of Goods

(1) Transfer of title in goods.

(2) An agreement in which transfer of title of property in goods will pass at a future date upon payment of full consideration.

(3) Where goods forming part of the assets of a business are transferred or disposed of by or under the directions of the person carrying on the business so as no longer to form part of those assets, whether or not, for a consideration, such transfer or

(1) Transfer of right in goods or of undivided share in goods without transfer of title thereof.

(2) Lease, tenancy, easement, license to occupy land.

(3) Lease or letting out of the building including a commercial, industrial or residential complex for business or commerce, either wholly or partly.

(4) Treatment or process being applied to another person’s goods.

Supply of Services




Supply of Goods

disposal.

(4) Where any person ceases to be a taxable person, any goods forming part of the assets of any business carried on by him shall be deemed to be supplied by him in the course or furtherance of his business immediately before he ceases to be a taxable person, unless—

a) The business is transferred as a going concern to another person; or

b) The business is carried on by a personal representative who is deemed to be a taxable person

(5) Supply of goods by any unincorporated association or body of persons to a member for cash, deferred payment or other valuable consideration.

(5) Where, by or under the direction of a person carrying on a business, goods held or used for the purposes of the business are put to any private use or are used, or made available to any person for use, for any purpose other than business, whether or not for a consideration, the usage or making available of such goods.

(6) Renting of immovable property.

(7) Construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or before its first occupation, whichever is earlier.

(8) Temporary transfer or permitting the use or enjoyment of any intellectual property right.

(9) Development, design, programming, customization, adaptation, up gradation, enhancement, implementation of information technology software.

(10) Agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an

Supply of Services



Supply of Goods

act.

(11) Works contract

(Works Contract means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in execution of such contract).

(12) Transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration.

(13) Supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration.

Supply of Services

Section II WHAT BUSINESSES NEED TO KNOWABOUT THE GST LAW?

3.1 General Provisions and Threshold Limit for Registration

- Every supplier shall be liable to be registered under each State GST Act or

UTGST Act for the State or Union Territory, other than special category

states, from where he makes a taxable supply, if his aggregate turnover in a

financial year exceeds Rs. 20 lakhs. (Rs. 10 lakhs for certain Special Category

States)

- Aggregate turnover means aggregate value of all taxable supplies (whether

on his own account or behalf of principal), computed on all India basis having

same Permanent Account Number (PAN). The aggregate turnover includes

the following:

Chapter 3 Registration Requirements

+ + + =Taxable Supplies

Exempt Supplies

Export Inter-StateAggregate Turnover

- A person who has once obtained GST registration will have to charge GST on

outward supplies made, as applicable, irrespective of the turnover. There is no

exemption related to turnover for registered taxpayers under GST regime.

- Person having multiple business verticals in a State have an option for

obtaining separate registration for each business vertical.

- PAN based registration having 15-digit alphanumeric structure will be allotted

to every assessee. In this, the first 2 digits shall be the State Code and this

shall be followed by 10 digit PAN.

- Registration certificate and GSTIN has to be displayed at the principal/every

additional place of registered person.

- Every supplier shall apply for registration in every such State or Union

Territory in which he is so liable within 30 days from the date on which he

becomes liable to registration.

- A person without GST registration can neither collect GST from recipient nor

3.2 Time Limit for Registration



3.3 Registration Process

Every Taxable Person(other than for personsas specified below)

FORM GST REG - 01

FORM GST REG - 02

(Acknowledgement)

FORM GST REG - 03

(Notice to applicant, in case of

deficiency relating to

information or document furnished)

FORM GST REG - 04

(Furnishing of clarification,

infromation or documents)

FORM GST REG - 06(Certificate

of Registration)

FORM GST REG - 05(Rejection

of application)

3 working days

7 working days

If reply not received within 7 working days

If officer is not satisfied

7 working days

3 working days

3.4 Persons Not Liable for Registration under the GST Law

The following persons shall not be liable to be registered:

a. Any person engaged exclusively in business of supplying goods / services

that are not liable to tax or are wholly exempt from tax.

b. An agriculturist, to the extent of supply of produce out of cultivation of land.

c. Person who are making supplies where total tax is payable by recipient of

supplies are exempt from registration under GST Act.

d. Job workers engaged in making inter-State supply of services.

e. Persons making inter-State supplies of taxable services and having an

aggregate pan India turnover not exceeding Rs. 20 lakhs (10 lakhs in case of

special category states) in a financial year.


claim any ITC.


3.5 Mandatory Registration

Following category of persons have to obtain mandatory registration irrespective of

turnover:

Persons making any inter-state taxable supply

of goods

Input Service Distributor, whether

or not separately registered

Persons liable to pay under RCM

Casual Taxable persons making taxable supply

OIDAR from a place outside India to

unregistered person in India

Non-Resident Taxable person making taxable

supply

Persons who supply, through an e-commerce operator who is required

to collect TCS

Categories of services the tax on which shall

be paid by the e-commerce operator

E-Commerce Operator

Persons who are required to deduct TDS

Such other person or class of persons as

may be notified.

Persons who supply on behalf of other registered taxable persons whether as an agent or otherwise


Chapter 4 Time of Supply

Nature of supply

General Rule

Time of Supply of Goods

Earliest of the following:

Time of Supply of Services


(i) Date of issue of invoice; or

(ii) Date of receipt of payment

4.1 The liability to pay GST on the supply of goods / services shall arise at the time of

supply of goods / services. For ascertaining time of supply, it is imperative to

identify whether the supply is that of a good or that of a service. The time of supply

to be determined is as given below:

The time limit for issuing invoice is before or at time of :-

(i) Removal of goods where supply involves movement of goods; or

(ii) In other cases, at the time when goods are delivered.

Date of issue of invoice

The time limit within which invoice is required to be issued

If invoice is issued within time limit


(i) Date of provision of service or

(ii) Date of Receipt of payment

If Invoice is not issued within time limit

* The time limit for raising invoice is within 30 days from the date of supply of service.

“The date of receipt of payment” shall be the date on which the payment is entered in the books of account of the supplier or the date on which the payment is credited to his bank account, whichever is earlier.

In case of amount received up to Rs. 1,000 in excess of amount indicated in the tax invoice, the time of supply to the extent of such excess amount shall, at the option of the said supplier will be the date of issue of invoice in respect of such excess amount.

Supply by vouchers

(i) Date of issue of voucher, if supply is identifiable at that point; or

(ii) The date of redemption of voucher, in all other cases.



Nature of supply

Time of Supply of Goods Time of Supply of Services

Not possible to determine time of supply

i. Date on which return is to be filed.

ii. Date on which the tax is paid.

Addition in value of supply by way of interest, late fee or penalty

Date on which supplier receives such addition in value.

4.2 Where there is change in effective rate of tax in respect of supply of goods /

services, the time of supply shall be determined as follows:

Goods or Services have been supplied before the change of rate

Goods or Services have been supplied after the change of rate

Particulars Payment before change in rate

Payment After change in rate

Issue of invoice before change in rate

Normal Rule

Issue of invoice after change in rate

Date of invoice (old rate)

Date of receipt of payment (old rate)

Date of invoice or payment, whichever is earlier (new rate)

Particulars Payment before change in rate

Payment After change in rate

Issue of invoice before change in rate

Normal Rule

Issue of invoice after change in rate

Date of invoice (new rate)

Date of receipt of payment (new rate)

Date of invoice or payment, whichever is earlier (old rate)



For the purposes of the above, the date of receipt of payment shall be the date of

credit in the bank account when such credit in the bank account is after 4 working

days from the date of change in the rate of tax.

- In case supply of service ceases under contract before completion, invoice to

be issued when supply ceases to the extent of supply made before such

cessation.

- In case of goods sent or taken on approval for sale or return which are

removed before the supply takes place, invoice must be issued before or at

the time of supply or within 6 months from date of removal.

- The invoice to be issued within 45 days from the date of supply by the

supplier who is an insurer or a banking company or a financial institution,

including a non-banking finance company.

4.3 Time Limit for Issuance of Invoice in Certain Cases


5.1 Importance of Place of Supply

- The Integrated Goods and Services Tax Act, 2017 (IGST Act) shall be

applicable to the whole of India for levying Integrated Goods and Services Tax

(IGST) on the inter-state supply of any goods / services at the rate to be

specified in the schedule to the IGST Act.

- Intra State Vs. Inter State

Location of

Supplier

Place of supply

Same state / UT

Intra State Supplies

Location of

Supplier

Place of supply

Different state / UT

Inter State Supplies

The following shall be treated as Inter-state supply:

1. Supply of goods / services imported into the territory of India, till they cross the custom frontiers of India.

2. Supply where supplier is located in India and place of supply is outside India.

3. Supply to or by Special Economic Zone developer or Special Economic Zone unit.

4. Supply made to a tourist.

5. Supply within taxable territory which is neither Intra-state nor covered anywhere under the Act.

- For chargeability under IGST Act, the following shall be treated as

establishment of distinct persons:

i. an establishment of a person in India and any of his other

establishments outside India, or

ii. an establishment of a person in a State and any of his other

establishments outside that State, or

Chapter 5 Place of Supply


iii. an establishment in a state or union territory and any other

establishment being business vertical registered within state or union

territory.

The Place of Supply of Goods to be determined as follows:

5.2 Place of Supply of Goods

Nature of supply Deemed place of supply

Supply involving movement of goods

Goods delivered by supplier to recipient on direction of third person whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to the goods or otherwise

Supply not involving movement of goods

Goods assembled or installed at site

Goods supplied on board a conveyance such as vessel, an aircraft, a train or motor vehicle

Goods imported into India

Goods exported from India

Location of goods at the time at which the movement of goods terminates for delivery to recipient

The principal place of business of third person

Location of goods at time of delivery to recipient

Place of installation or assembly

Location at which goods taken on board

Location of the Importer

Location outside India

5.3 Place of Supply of Services

- The rules for determining Place of Supply of Services have been divided in

two parts:

(a) Where both the location of supplier and recipient is in India.

(b) Where either the location of supplier or recipient is outside India.



Place of Supply where both the location of supplier and recipient of service is in India

Place of Supply where either the location of supplier or the location of recipient of service is outside India

(a) In case of supply made to registered person - location of such person

(b) In case of supply made to person other than registered person:

(i) Address of recipient exists on record - Location of recipient

(ii) Other cases - Location of supplier

(a) Location of recipient available in the ordinary course of business –Location of recipient

(b) Other cases - Location of supplier


- General Rule


Chapter 5

Place of S

upply

Deemed place of Supply in case location of either of SP or SR is located outside India

Deemed place of Supply in case of location of SP & SR is located in India

Particulars

(a) Immovable property or boat or vessel is located or intended to be located in India - Location where immovable property or boat or vessel is located or intended to be located

(b) Other than above - Location of recipient

Place where immovable property is located or intended to be located.

Place of Supply

- Exception rules to general rule to determine the Place of Supply of Services are as follows:

(a) Services directly relating to immovable property including services provided by architects, interior decorators, surveyors, engineers and other related experts or estate agents, any service provided by way of grant of rights to use immovable property or for carrying out or co-ordination of construction work

(b) services by way of lodging accommodation by a hotel, inn, guest house, homestay, club or campsite and including house boat or any other vessel

(c) services by way of accommodation in any immovable property for organizing any marriage or reception or matters related therewith, official, social, cultural, religious or business function including services provided in relation to such function at such property

(d) service ancillary to above services

Services supplied directly in relation to an immovable property, including services by experts and estate agents, supply of hotel accommodation by a hotel, inn, guest house, club or campsite, by whatever name called, grant of rights to use immovable property, services for carrying out or co-ordination of construction work, including architects or interior decorators

Services covered

Related to immovable property or boat or vessel

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Place of S

upplyDeemed place of Supply in case location of either of SP or SR is located outside India


Particulars

(a) Where the immovable property or boat or vessel is located in more than state or union territory, value of service provided in each state to be ascertained separately, in proportion to value for services separately collected or determined as per terms of contract or agreement.as place of supply is in each such state.

(b) In absence of contract/agreement on such other basis as may be prescribed in this behalf.

(a) Value of service provided in each state to be ascertained separately, in proportion to value for services separately collected or determined as per terms of contract or agreement as place of supply is in each such state.

(b) In absence of contract/agreement on such other basis as may be prescribed in this behalf.

(c) If services are supplied at more than one location, including a location in the taxable territory, place of supply shall be location in taxable territory.

Remarks

Places where services are actually performed (a) Places where services are actually performed

(b) For services requiring physical availability of goods and provided from a remote location by way of electronic means - Location where goods are situated at the time of supply of service

Place of Supply

Performance based services

Services provided by restaurant and catering services, personal grooming, fitness, beauty treatment, health service including cosmetic and plastic surgery

(a) Services in respect of goods that are required to be made physically available by the recipient of service to the supplier of service, or to a person acting on behalf of the supplier of service in order to provide the service

(b) Services supplied to an individual, represented either as the recipient of service or a person

Services covered


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Chapter 5

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Particulars

acting on behalf of the recipient, which require the physical presence of the receiver or the person acting on behalf of the recipient, with the supplier for the supply of the service

(c) Nothing shall apply in respect of goods imported into India for repairs and re- exported.

(a) Value of service provided in each state / union territory to be ascertained separately, in proportion to value for services separately collected or determined as per terms of contract or agreement as place of supply is in each such state.

(b) In absence of contract/agreement on such other basis as may be prescribed in this behalf

(c) If services are supplied at more than one location, including a location in the taxable territory, place of supply shall be location in taxable territory

Remarks

(a) Supplied to a registered person - location of recipient;

(b) Other than above - location where services are actually performed.

No exception rulePlace of Supply

Training and Performance Appraisal


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Particulars

Location where the event is actually held or where the park or such other place is located

Location where the event is actually heldPlace of Supply

Admission to events or amusement parks

a) Services provided by way of admission to a cultural ,artistic, sporting, scientific, educational, entertainment event or amusement park

b) Services or any place ancillary to point

Services supplied by way of admission to, or organization of, a cultural, artistic, sporting, scientific, educational, or entertainment event, or a celebration, conference, fair, exhibition, or similar events, and of services ancillary to such admission

Services covered

(a) If provided to a registered person , then location of such person

(b) Other than above,

(i) If event is held in India - location where the event is actually held

(ii) if the event is held outside India, location of the recipient.

Location where the event is actually heldPlace of Supply

Organization of event or services ancillary to the event

(a) Service by organization of a cultural, artistic, sporting, scientific, educational or entertainment event including supply of service in relation to a conference, fair, exhibition, celebration or similar event

(b) Services ancillary to services in point

(c) Services of assigning sponsorship for an event

Services supplied by way of organization of, a cultural, artistic, sporting, scientific, educational, or entertainment event, or a celebration, conference, fair, exhibition, or similar events, and of services ancillary to such admission

Services covered


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Particulars

(a) If service is provided in more than one state, value of service provided in each state to be ascertained separately, in proportion to value for services separately collected or determined as per terms of contract or agreement as place of supply is in each such state.


Remarks (a) Value of service provided in each state to be ascertained separately, in proportion to value for services separately collected or determined as per terms of contract or agreement as place of supply is in each such state.


(c) If services are supplied at more than one location, including a location in the taxable territory, place of supply shall be location in taxable territory.

(a) Transportation of goods including by mail or courier –

(i) If provided to a registered person –

Location of recipient

(ii) Other than above - location where goods are handed over for transportation

(a) Transportation of goods other than by mail or courier – Destination of goods

(b) Transportation of goods by mail or courier –

No Exception Rule

Place of Supply

Transportation of Goods

Passenger Transportation service

(a) Right of passage to be exercised in future and point of embarkation not known – No Exception Rule

(b) Other than above -

(i) Provided to a registered person – Location

Location where the passenger embarks on the conveyance for a continuous journey

Place of Supply

Passenger Transportation service


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Particulars

of recipient

(ii) Provided to an unregistered person - Location where the passenger embarks on the conveyance for a continuous journey

Return journey shall be treated as a separate journey even if right of passage issued at the same time as right of passage for onward journey

Remarks

Location of first scheduled point of departure of that conveyance for that journey

First scheduled point of departure of that conveyance for the journey

Place of Supply

Services provided on board a conveyance including a vessel, an aircraft, a train or a motor vehicle

(a) Banking and other financial services –

(i) Location of recipient on records of supplier

- Location of recipient

(ii) Other than above - Location of supplier

(b) Stock broking – Same as above

(a) Banking and other financial services

(i) To account holders – Location of supplier of service

(ii) Other than above – No Exception Rule

(b) Stock broking – No Exception Rule

Place of Supply

Banking and other Financial Services

“continuous journey” means a journey for which a single or more than one ticket or invoice is issued at the same time, either by a single supplier of service or through an agent acting on behalf of more than one supplier of service, and which involves no stopover between any of the legs of the journey for which one or more separate tickets or invoices are issued.

The term “stopover” means a place where a passenger can disembark either to transfer to another conveyance or break his journey for a certain period in order to resume it at a later point of time


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Particulars

Non-banking financial company means

(a) a financial institution which is a company;

(b) a non-banking institution which is a company and which has as its principal business receiving of deposits, under any scheme or arrangement or in any other manner, or lending in any manner; or

(c) such other non-banking institution or class of such institutions, as the Reserve Bank of India may, with the previous approval of the Central Government and by notification in the Official Gazette specify

No exception Rule Location of the supplier of servicePlace of Supply

Intermediary services

Intermediary means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of a service (hereinafter called the ‘main’ service) or the supply of goods, between two or more persons, but does not include a person who supplies such goods or service or both or securities on his own account .

Remarks

(a) Supplied to a registered person - Location of recipient;

(b) Other than above - Location of recipient of service on records of supplier of service

No Exception RulePlace of Supply

Supply of insurance services

Remarks


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Particulars

(a) Services by way of fixed telecommunication line, leased circuits, internet leased circuit, cable or dish antenna - Location where telecommunication line, leased circuit or cable connection or dish antenna is installed for receipt of services

(b) In case of mobile connection for telecommunication and internet services provided on post-paid basis - Location of billing address of the recipient of services on record of the supplier of services

(c) In cases where mobile connection for telecommunication, internet service and D2H are provided on pre-payment through avoucher or any other means(i) Sold through agent - Location of selling

agent/ re-seller/ distributor of sim card/


Telecommunication services including data transfer, broadcasting, cable and direct to home television (D2H)

services to any person

(a) Value of service provided in each state to be ascertained separately, as per terms of contract or agreement as place of supply is in each such state.



Advertisement services to Government, Statutory Body or a Local Authority


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Chapter 5

Place of S



Particulars

recharge voucher as per record of supplier at the time of supply.

(ii) Sold to final subscriber - Location where such pre-payment is received or such vouchers are sold

(d) Pre-paid service availed or the recharge made through internet banking or other electronic mode of payment - Location of recipient of services on record of the supplier of services

(e) In cases other than (a) to (d) –(i) Address of the recipient as per the records

of the supplier of service is available – address of such recipient

(ii) In other cases - Location of supplier of services

If leased circuit is installed in more than one state–

(i) Value of service provided in each state to be ascertained separately, as per terms of contract or agreement as place of supply is in each such state.

(ii) In absence of contract/agreement on such other basis as may be prescribed in this behalf

Remarks

No exception Rule Location of Supplier of servicePlace of Supply

Vehicle Hiring Service


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Deemed place of Supply in case location of either of SP or SR is located outside India


Particulars

Services consisting of hiring of means of transport up to a period of 1 month other than aircrafts and vessels, but including yachts

Remarks

Chapter 5

Place of S

upply


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Chapter 6 Value of Supply

6.1 Introduction

Under GST, which is an ad valorem tax, it is important to determine the value of

taxable supply. Valuation under GST is based on transaction value provided price is

the sole transaction and the parties are unrelated. Valuation of supplies is important

and warrants attention of our readers.

Value of Supply

Supplier and recipient not

related

Transaction Value

Price is the sole

consideration

6.2 The value of supply includes & excludes the following:

The value of supply shall include:

1. Any taxes, duties, cess, fees and charges levied under any statue other

than taxes under GST.

2. Any amount that supplier is liable to pay in relation to such supply but

which has been incurred by the recipient of the supply and not included in

the price actually paid or payable for the supply.

3. Incidental expenses, including commission and packing, charged by the

supplier to the recipient and any amount charged for anything done by the

supplier in respect of the supply at the time of, or before delivery of supply.

4. Interest or late fee or penalty for delayed payment of any consideration for

any supply.

5. Subsidies directly linked to the price excluding subsidies provided by the

Central / State Government. The subsidy received by supplier only to be

included.


The value of supply shall exclude:

Any discount given, if such discount is recorded in invoice. However, where such

discount is given after the supply is effected, such deduction of discount should

be considered from the value only if:

a. It is established in terms of agreement entered; and

b. Input Tax Credit attributable to the discount has been reversed by

recipient of the supply.


6.3 The CGST Rules, 2017 provides for valuation in the following nature of transactions:

Sr. No.

1.

Particulars

Where consideration is not wholly in money

Value of Supply

a) Open Market value

b) If open market value is not available:

Sum total of Consideration in money and any such further amount in money as equivalent to the consideration not in money if such amount is known at the time of supply

c) If not determinable as per above, the value of supply of ‘like kind and quality’

d) If not determinable as per above, be the sum total of consideration in money and such further amount in money that is equivalent to consideration not in money as determined under Sr. No. 4 or 5, in that order.

2. Where supplies are made between distinct or related persons, other than through an agent

a) Open Market value

b) If open market value is not available,

the value of supply of goods or service or both of ‘like kind and quality’

c) If value is not determinable as per above, as determined under Sr. No. 4 or 5, in that orderProvided where goods are intended for further supply as such by recipient, value shall, at the option of supplier be 90% of price charged for supply of goods of like kind and quality by the recipient to his customer not being a related person.


3. Where Supply of goods between the principal and his agent

(Provision does not apply when sale is to selling agent on principal to principal basis)

a) The open market value of the goods supplied

or

At the option of the supplier (not less than 90% of the price charged for the supply of goods of kind and quality to his customer and customer not being a related person where the goods intended for further supply)

b) If value is not determinable as per above, as determined under Sr. No. 4 or 5, in that order

Provided further that where the recipient is eligible for full input tax credit, the value declared in the invoice shall be deemed to be the open market value of the goods or services.

Sr. No. Particulars Value of Supply

4. Value of Supply based on cost

Where value is not determinable as per above, then value shall be:

Cost of Production or Manufacture; or

110% of Cost of acquisition of such goods; or

Cost of provision of such services

The supplier of service has an option to disregard this rule and apply residual method

5. Residual Method Where value is not determinable as per above, then value shall be determined using reasonable means consistent with the principles and general provisions of valuation provisions.


}

6.4 Air Travel Agents

Value of Supply of services in relation to booking of air tickets by an air travel agent,

shall be determined as under:

- Domestic Bookings : 5% of the Basic Fare

- International Bookings : 10% of the Basic Fare



‘Basic Fare’ means that part of air fare on which commission is normally paid to the

air travel agent by the airline.

The value of services in case of services provided by the insurer carrying on life

insurance business shall be determined as under:

- The Gross premium charged from a policy holder, reduced by the amount

allocated for investment, or saving on behalf of the policy holder, if such

amount is intimated to the policy holder at the time of supply of service; or

- In case of single premium annuity policies other than above, 10% of single

premium charged from the policy holder; or

- In all other cases, 25% of the premium charged from the policy holder in the

1st first year and 12.5% of premium charged from policy holder in subsequent

years.

Provided that such option shall not be available in cases where the entire premium

paid by the policy holder is only towards the risk cover in life insurance.

The value of a token, or a voucher, or a coupon or a stamp (other than postage

stamp) which is redeemable against a supply shall be equal to the money value of

the supply redeemable against such token, voucher, coupon, or stamp.

The expenditure or cost incurred by the supplier as a pure agent of the recipient of

supply of service shall be excluded from the value of supply. This is subject to

conditions laid out in CGST Rules, 2017.

The rate of exchange for determination of value of taxable goods shall be the

applicable rate of exchange as notified by the board under section 14 of the

6.5 Insurer Carrying on Life Insurance Business

6.6 Valuations in Case of Token, Voucher or Coupon

6.7 Value of Supply of Services in Case of Pure Agent

6.8 Consideration of Rate of Exchange of Currency For Determination of Value



Customs Act, 1962 for the date of time of supply of such goods in terms of section

12 of the Act.

The rate of exchange for determination of value of taxable services shall be the

applicable rate of exchange determined as per the Generally Accepted Accounting

Principal (GAAP) for the date of time of supply of such services in terms of section

13 of the Act.

Where the value of supply is inclusive of IGST tax or as the case may be, CGST, SGST,

UTGST, the tax amount shall be determined in the following manner,

Tax Amount = Value Inclusive of taxes * tax rate (in %) of IGST/CGST/SGST or UTGST

6.9 Value of Supply Inclusive of Integrated Tax, Central Tax, State Tax, Union Territory

Tax

(100 + sum of tax rates, as applicable, in %)


Chapter 7 Input Tax Credit

7.1 Introduction

7.2 Availability of Input Tax Credit (‘ITC’)

Input tax credit is the mechanism under GST that seeks to avoid cascading effect of

taxes. Under GST, there is a need to map different inward supplies and ascertain

eligibility of availing input tax credit.

- Every registered person shall be entitled to take credit of input tax admissible

on any supplies which are used or intended to be used in the course or

furtherance of his business and the said amount shall be credited to the

electronic credit ledger of such person.

- Input tax in relation to a registered person, means the Central tax, State tax,

Integrated tax or Union territory tax charged on any supply of goods or

services or both made to him and includes

a) The integrated goods and services tax charged on import of goods

b) The tax payable under the RCM

but does not include the tax paid under the composition levy.

- The inward supplies shall be classified either as Input, Capital Goods or Input

Service which are defined as under:

Input

Means any goods other than capital goods used or intended to be used by supplier in course or furtherance of business.

Capital Goods

Means goods, the value of which is capitalized in the books of accounts of the person claiming the ITC and which are used or intended to be used in the course or furtherance of business.

Input Service

Means any service used or intended to be used by a supplier in the course or furtherance of business.

7.3 Non - admissible Credits

The ITC shall not be available in respect of the following inward supplies:



Food and beverages, outdoor catering, beauty treatment, health services,

cosmetic and plastic surgery except where such inward supply of a particular

category is used by a registered person for making an outward taxable supply of

the same category or as an element of taxable composite or mixed supply

Membership of a club, health and fitness Centre

Rent-a-cab, life insurance, health insurance except where

a) the Government notifies the services which are obligatory for an

employer to provide to its employees under any law for the time being in

force; or

b) such inward supply of a particular category is used by a registered person

for making an outward taxable supply of the same category or as an

element of taxable composite or mixed supply

Travel benefits extended to employees on vacation such as leave or home travel

concession

Motor vehicles and other conveyances except when they are used

(a) For making the following taxable supplies:

(i) Further supply of such vehicles or conveyances; or

(ii) Transportation of passengers; or

(iii) Imparting training on driving, flying, navigating such vehicles or

conveyances

(b) For transportation of goods

(A) Works contract services when supplied for construction of immovable property, other than plant and machinery, except where it is an input service for further supply of works contract service

(B) Supply received by a taxable person for construction of an immovable property, other than plant and machinery, on his own account including when used in course or furtherance of business


The word “construction” includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalization, to the said immovable property.

‘Plant and Machinery’ means apparatus, equipment, machinery fixed to earth by foundation or structural support that are used for making outward supply and includes such foundation and structural supports but excludes

- land, building or any other civil structures;

- telecommunication towers; &

- pipelines laid outside the factory premises


Goods lost, stolen, destroyed, written off or disposed of by way of gift or free

samples

Any tax paid in accordance with

- Determination of tax not paid / short paid / erroneous refunded / ITC

wrongly availed or utilized by reason of fraud / any willful misstatements /

suppression of facts;

- Detention, seizure & release of goods & conveyances in transit;

- Confiscation of goods or conveyances and levy of penalty.

7.4 Conditions for Availing ITC

- ITC in respect of inward supply shall be eligible only if:

l Taxpayer is in possession of tax invoice, debit note or such other tax

paying document;

Supply used for personal consumption

Supply received by non-resident taxable person except on goods imported by

him

Supply on which tax has been paid under composition scheme



IGST credit IGST CGST

SGST / UTGST

CGST Credit CGST IGST

SGST / UTGST

SGST / UTGST Credit

SGST / UTGST IGST CGST

To be utilized in the Sequence from left to right

7.6 Tax Paying Document for Claiming ITC

- ITC can be availed on following documents:

l A Tax invoice issued by the supplier, containing all the details as are

required in tax invoice.

l A Debit Note issued by the supplier, containing all the details as are

required in debit note.

l A Bill of Entry.

l An invoice raised by recipient where supplies are received from

l The goods / services are received; (in respect of goods received in

lots or installments, he is entitled to ITC upon receipt of last lot or

installment.)

l The tax charged in respect of such supply been paid to the credit of

appropriate government either by cash or utilization of ITC; (except in

case of ITC availed on provisional basis)

l Taxpayer has filed the return.

7.5 Utilization of ITC for Making Payment Towards Output Tax



unregistered person, subject to payment of tax.

l Document issued by Input Service Distributor.

- Where a recipient fails to pay to the supplier within a period of 180 days from

the date of issue of invoice towards value of supply along with tax payable

thereon, other than the supplies on which tax is payable on RCM, an amount

equal to the ITC availed by the recipient shall be added to his output tax

liability, along with interest for the period starting from date of availing ITC till

the date when the amount is added to the output tax liability. The said

condition is not applicable for cases where supplies are made without

consideration.

- The credit on such inward supplies shall be eligible on making payment to

inward supplier along with tax payable thereon.

- No ITC shall be allowed of tax component on the cost of capital goods and

plant & machinery of which registered person has claimed depreciation

under the Income Tax Act, 1961.

- No ITC in respect of any invoice / debit note for supply after following period:

7.7 Conditions for Making Payment to Inward Supplier

7.8 Depreciation and ITC cannot be availed together

7.9 Time limit for Availing ITC

l Filing return for the month of September following the end of F.Y. to which such invoice or invoice relating to such debit note pertains

OR

l Filing of annual return.

Whichever is earlier}The said time limit is not applicable for re-availment of any credit that has been reversed earlier.



A registered person shall not be entitled to take input tax credit in respect of any

invoice or debit note for supply of goods or services or both after the due date of

furnishing of the return for the month of September following the end of financial

year to which such invoice or invoice relating to such debit note pertains or

furnishing of the relevant annual return, whichever is earlier

- The reversal of ITC on Input, Input Service & Capital Goods is required to be

made in case of:

l Partial use of inputs for non-business.

The goods / services used by registered person partly for business

and partly for other purposes the credit amount shall be restricted to

input tax attributable to purposes of business.

l Proportionate Reversal

Goods / services used by registered person partly for effecting

taxable supplies including zero-rated supplies and partly for:

n effecting exempted supplies; or

n Outward supplies where recipient is liable to pay tax;

n transactions in securities, sale of land & sale of building except

under construction sale of flat.

the credit shall be restricted to such amount of ITC as attributable to taxable

supplies including zero-rated supplies.

‘Exempt supply’ means supply of any goods or services or both which

attracts nil rate of tax or which may be wholly exempt and includes non-

taxable supply.

7.10 Reversal of ITC



7.11 Banking Companies and NBFC

7.12 Availing ITC on Inputs / Capital Goods Held in Stock

a. A banking company or a financial institution including a NBFC, engaged in

supplying services by way of accepting deposits, extending loans or

advances shall have the option to either comply with the provisions of

proportionate reversal, or avail of, every month, an amount equal to 50% of

the eligible ITC in that month.

b. It is pertinent to note that unlike the previous regime where 50% reversal

was to be done only for input and input services and 100% credit was

available for eligible credits on capital goods, such taxpayers have to now

reverse 50% of the credit on capital goods as well.

c. Restriction of 50% shall not apply to the tax paid on supplies made by one

registered person to another registered person having same PAN.

d. Option once exercised shall not be withdrawn during the remaining part of

the financial year.

- The tax paid on Inputs held in stock or contained in semi-finished or finished

goods (‘Inputs in Stock’) or on Capital Goods are eligible as ITC in the following

circumstances:

Scenario Inputs in Stock Capital Goods Conditions

New registration obtained within 30 days from the date when person becomes liable to register

Day immediately preceding the date on which he becomes liable to register

Not admissible - A taxable person shall not be entitled to take ITC in respect of any supply after expiry of 1 year from date of issue of tax invoice relating to such supply.



Scenario Inputs in Stock Capital Goods Conditions

Voluntary Registration

Day immediately preceding the date of grant of registration

Not admissible

Exempt supply becomes taxable supply

ITC on inputs relating to exempt supplies

Day immediately preceding the date from which supply becomes taxable

ITC on capital goods exclusively used for exempt supplies

Day immediately preceding the date from which supply becomes taxable

After reducing 5% per quarter of a year or part thereof from the date of invoice till the date supply becomes taxable

- Electronic Declaration to be filed within 30 days from the date of his becoming eligible.

- Certificate from practicing CA/CWA if credit claims exceeds Rs.2 lakhs.

7.13 Reversal of ITC on account of removal of capital goods or plant & machinery

7.14 Input Service Distributor

- In case of supply of capital goods or plant and machinery, on which ITC is

taken, the registered person shall pay an amount equal to ITC taken on the

said capital goods or plant and machinery as reduced by 5% for every quarter

or part thereof from the date of issue of invoice for such goods or tax on

transaction value of such capital goods or plant & machinery, whichever is

higher. However, refractory, bricks, moulds and dies, jigs and fixtures are

supplied as scrap, the registered person may pay tax on the transaction

value of such goods.

Under the GST regime, it is important to devise a mechanism for cross charging

certain common expenses and distributing them across multiple registered

presences. One of the manner in which taxpayers having multiple registered

presences across India can distribute their credits is the Input Service Distributor

mechanism.



- ‘Input Service Distributor’ means an office of the supplier which

receives tax invoices issued towards the receipt of input services and

issues a prescribed document for the purposes of distributing the

credit of Central tax, State tax, Integrated tax or Union territory tax

paid on the said services to a supplier having the same PAN as that of

the said office.

- Conditions for distribution of ITC by ISD:

l ITC can be distributed to recipients against a document.

l ITC distributed shall not exceed the amount of credit available for

distribution.

l The credit of tax paid on input services attributable to a recipient of

credit shall be distributed only to that recipient.

l ITC attributable to more than 1 recipient shall be distributed amongst

such recipients to whom the input service is attributable on pro-rata

basis of the turnover in a State or turnover in a Union territory of such

recipient, during the relevant period, to the aggregate of the turnover

of all such recipients to whom such input service is attributable and

which are operational in the current year, during the relevant period.

l ITC attributable to all recipients shall be distributed amongst such

recipients to whom the input service is attributable on pro-rata basis

of the turnover in a State or turnover in a Union territory of such

recipient, during the relevant period, to the aggregate of the turnover

of all recipients and which are operational in the current year, during

the relevant period.

The “relevant period” shall be–

i. If the recipients of credit have turnover in their States or Union

territories in the financial year preceding the year during which credit

is to be distributed, the said financial year; or



ii. If some or all recipients of the credit do not have any turnover in their

States or Union territories in the financial year preceding the year

during which the credit is to be distributed, the last quarter for which

details of such turnover of all the recipients are available, previous to

the month during which credit is to be distributed.

- ISD shall separately distribute amount of ITC as eligible and ineligible.

- ITC on account of central tax and state tax shall be distributed as follows:

a. Recipient located in same state in which ISD is located, ITC shall be

distributed as Central Tax and State Tax respectively;

b. Recipient is located in different state other than that of ISD, ITC shall

be distributed as Integrated Tax.

- Any ITC required to be reduced on issuance of credit note shall be

apportioned to each recipient in the same ratio in which ITC was distributed

and the amount so distributed shall be reduced from the amount to be

distributed in the month in which credit note is included in the return and shall

be added to the output tax liability, if the amount of credit available is

negative.

- Where the amount of credit to be reversed is short reversed, then such short

amount shall be added to the output tax liability for a month not later than

the month of September following the end of the financial year to which it

belongs and the person shall be liable to pay interest for the period starting

from 1st day of April of the succeeding financial year till the date of payment.


Chapter 8 Imports and Reverse Charge

Under the GST regime, generally, the tax is to be paid by the supplier. However, the

government has, by way of notification, specified categories of supply of goods / services

on which tax shall be paid on reverse charge basis by recipient. The categories of supplies

on which tax is to be discharged by recipient on reverse charge basis are as follows:

8.1 Imports of Goods / Services

Import of Goods means

Bringing goods into India from a place outside India.

The supply of any service, where

(a) the supplier of service is located outside India;

(b) the recipient of service is located in India; and

(c) the place of supply of service is in India.

Import of Services means

- As far as import of goods is concerned, there would be no impact on levy of

Basic Customs Duty (BCD), Social Welfare Surcharge, Anti-Dumping Duty,

Safeguard Duty and the like.

- The IGST and compensation cess will be levied on import as may be

applicable. Barring few commodities such as pan masala, certain petroleum

products which attract levy of CVD, majority of imports would attract levy of

IGST. Further, few products such as aerated waters, tobacco products, motor

vehicles etc would also attract compensation cess, over and above IGST.



8.2 Reverse Charge on Goods

Government has notified the following categories of goods, on which tax shall be

paid by the recipient under reverse charge:

HSN Code

Description of Service

Supplier of Goods

Recipient of Supply

1 0801 Cashew nuts, not shelled or peeled

Agriculturist

Any registered person

Sr No

2 1404 9010 Bidi wrapper (tendu)

Leaves

3 2401 Tobacco leaves

4 5004 to 5006 Silk yarn Any person who manufactures silk yarn from raw silk or silk worm cocoons for supply of silk yarn

5 Supply of Lottery State Government, Union Territory or any local authority

Lottery distributor or selling Agent

8.3 Reverse Charge on Services

Government has notified the following categories of services, on which tax shall be

paid by the recipient under reverse charge:

Nature of Services Service Provider Service Recipient

1 Import of service other than OIDAR services provided to non taxable online recipient

Person located in non taxable territory

Sr No

Any person located in the taxable territory other than non- taxable online recipient




2 Goods Transport Agency (GTA) in respect of transportation of goods by road

GTA

Sr No

- Factory- Registered society- Co-operative

society under any law

- Registered person underCGST/SGST/UTGST Act

- Body Corporate- Partnership firm- Casual taxable

person

3 Legal services An individual advocate including a senior advocate or firm of advocates

Any business entity.

4 Arbitral Tribunal An Arbitral Tribunal Any business entity.

5 Sponsorship Services Any Person Body corporate or partnership firm

6 Services by Government or local authority excluding:- Renting of immovable

property- Postal service provided

to a person other than government

- Services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport

- Transport of goods or passengers

Government or local authority

Any business entity.




7 Service provided by a director of a company or a body corporate to the said company or body corporate

A director of a Company or a body corporate

Sr No

A company or a body corporate

8 Service provided by an insurance agent

An insurance agent (as per circular issued, corporate insurance agents are not covered under reverse charge)

Any person carrying on insurance business

9 Service provided by an recovery agent

A recovery agent A banking / financial institution/nonbanking financial company

10 Transportation of goods by vessel from outside India up to customs station of clearance in India

A person located in non- taxable territory to a person located in non- taxable territory

Importer of goods

11 Transfer or permitting the use or enjoyment of a copyright relating to original literary, dramatic, musical or artistic works

Author or music composer, photographer, artist, etc.

Publisher, Music Company, Producer or the like, located in the taxable territory

8.4 Inward Supply from Unregistered Person

- The tax on supply of taxable goods / services, by an unregistered person to a registered person, shall be paid by recipient on reverse charge basis.

- Every registered person who is liable to pay tax under reverse charge shall issue a payment voucher at the time of making payment.

- Liablility to pay tax on inward supply from an unregistered person has been deferred till 30th June, 2018 as per the recommendations made during 26th meeting of the GST Council held in New Delhi on 10 March 2018.


9.1 Export of Goods/Services

- “Zero Rated supply” means any of the following supplies of goods/services

or both, namely :-

a) Export of goods/services; or

b) Supply of goods/services to a SEZ developer/unit.

- A registered person making Zero rated supply in relation to IGST liability on

such supply , may exercise any of the two options that have been specified:

l Supply under bond / letter of undertaking (LUT), subject to such

conditions, safeguards and procedures as may be prescribed, without

payment of IGST and claim refund of unutilized input tax credit; or

l Supply subject to such conditions as may be prescribed, on payment

of IGST and claim refund of such tax paid in relation to the said supply.

- Supply made by a registered supplier to a merchant exporter (registered

under Export Promotion Council or a Commodity Board) attracts a nominal

GST rate of 0.1% subject to certain conditions. The conditions are specified

Chapter 9 Export and Supply to SEZ

Export of Goods means Export of Services means

Taking goods out of India to a place outside India.

The supply of any service when

(a) the supplier of service is located in India;

(b) the recipient of service is located outside India;

(c) the place of supply of service is outside India;

(d) the payment for such service has been received by the supplier of service in convertible foreign exchange; and

(e) the supplier of service and recipient of service are not merely establishments of a distinct person.


Chapter 9 Export & Supply to SEZ

in notification no 40.2017-Central Tax (rate).

- With effect from Financial Year 2017 – 18, the online process for obtaining

letter of undertaking has commenced on the GSTN portal. It must be

emphasized that all taxpayers who have obtained a LUT for FY. 2017 – 18 will

need to renew the same online. Renewal is not automatic. The online process

may thereafter also require manual submission and representation before

the authorities.

- In case of an entity having a unit in DTA as well as SEZ in same state, then

both the units need to obtain separate registration.

- Supply made by SEZ unit /developer shall be treated as inter-state supply.

- Supply from SEZ unit/developer to DTA shall be considered as Import and

Custom Duties including IGST shall be levied.

- Supply from SEZ unit/developer to outside India shall be treated as Export

subject to fulfillment of certain conditions and shall be regarded as Zero

Rated supply.

- Supply made from DTA unit to SEZ unit/developer shall be considered as a

‘zero rated supply’. Import of Services by SEZ Unit/Developer for authorized

operations is exempt. In a similar manner goods imported by SEZ

unit/Developer shall also be exempted from payment of IGST.

9.2 SEZ under GST


10.1

10.2

‘Job Work’ means undertaking any treatment or process by a person on goods

belonging to another registered person.

The Inputs / Capital Goods can be sent to the place of the job worker with following

conditions:

Chapter 10 Job Work

- Even if the goods are sent directly to the premises of the job worker, the

principal can take ITC on the goods. Time limit in case of goods sent directly

to job worker premise will be counted from the date of receipt of goods by

job worker.

- Intermediate products arising as a result of any treatment or process carried

out on inputs sent to the job-worker shall also be considered as inputs for

the purpose of this chapter. The responsibility for maintenance of proper

accounts for inputs / capital goods shall lie with the principal.

- Waste and scrap generated during job work can be supplied from the place of

Registered person (principal) may send goods without payment of

GST to a job worker

To bring back such inputs or capital goods, within

1 or 3 years respectively at his place of business

To directly supply such inputs or capital goods (on payment

of tax within India) within 1 or 3 years respectively

from place of job worker.

The period of 1 or 3 years does not apply to moulds

and dies, jigs and fixtures or tools sent out for job work

Permitted only when principal declares the place of business of the job worker as his additional place of business exceptin case where:1)The job worker is registered; or2)Where the principal is engaged in the supply of such goods as may be notified


Chapter 10 Job Work

job worker after making payment of GST by job worker if he is registered. In

all other cases, the liability to pay GST shall be on the principal.

- The movement of goods between principal and job worker, including where

such goods are sent directly to job worker, has to be under the cover of the

challans which also need to be incorporated in the monthly GST returns.

- If the inputs / capital goods are not brought back or supplied from the place

of job worker within the stipulated time limit, it will be deemed that the inputs

/ capital goods sent to job worker were supplied by principal to job worker on

the day when they were sent out. The challan itself will be deemed to be a

tax invoice.

- Form GST ITC 04 must be submitted by the principal every quarter in respect

of inputs and capital goods sent and received for job-work.

- Every manufacturer who sends goods to the job worker needs to send

goods under a delivery challan. Details of all such challans issued during a th

quarter needs to be filed in Form GST ITC 04 before the 25 day of the month

succeeding the last quarter.


Section III MAJOR CHANGES AND CURRENT ISSUES UNDER GST

Chapter 11 Documents and E-Way Bill

11.1 Documents and Contents

Following are the different types of documents along with contents which a

registered person requires to raise based upon the nature of transaction:

Document Type:

- Name, address and GSTIN of the supplier

- Consecutive Serial Number not exceeding 16 Characters.

- Date

Bill of Supply

To be Issued by: Registered person supplying exempted goods/services or both or paying tax under composition scheme

- HSN Code

- Description of goods/services

- Value of supply taking into account discount and abatement

Contents

Document Type:


- Consecutive Serial Number not exceeding 16 Characters

- Date

- Name, address and GSTIN or UIN of the recipient, if registered

- If recipient is unregistered and value of taxable supply is Rs. 50,000 or more, then name, address , address of delivery, state and state code of the recipient

- If recipient is unregistered and value of taxable supply is less than Rs. 50,000, then name, address , address of delivery, state and state code of the recipient, if recipient request that such details be recorded in the tax invoice

Tax Invoice

To be Issued by: Registered person making taxable supply of goods/services or both

- HSN Code


- Quantity and unit or Unique Quantity code

- Total Value

- Taxable Value taking into account discount or abatement

- Rate of tax

- Amount of tax charged

- Place of supply and State code, if inter state supply

- Address of delivery, if different from place of supply

- Amount of tax payable on reverse charge basis, if any

- Signature (manually or digitally)of Supplier

Contents



Document Type:



- Date


Payment voucher

To be Issued by: A registered person shall issue payment voucher in all the cases where tax is paid under reverse charge mechanism at the time of making payment to the supplier.

Contents


- Signature (manually or digitally) of Supplier

Document Type: Receipt Voucher

To be Issued by: A registered person receiving advance payment shall issue receipt voucher

Contents



- Date



- Advance amount

- Rate

- Place of supply and State code

- Whether tax is payable on reverse charge basis


Document Type:

- Name and address of the Supplier

Refund Voucher

Issued By: A registered person receives advance payment but no supply is made and no tax invoice is issued in respect of such advance payment, shall issue a refund voucher

- Number and date of receipt voucher

- Description of goods

Contents



- Amount paid

- Amount of tax payable

- Rate

- Place of supply and State code



Document Type:

- The word ”Revised Invoice” wherever applicable, indicated prominently

- Name ,address and GSTIN of the supplier

- Nature of the document


- Date of Issue


Revised Tax invoice and debit or credit note

To be Issued by: - A registered person shall issue a revised invoice in respect of invoice already issued during the period beginning with the effective date of registration till the date of issuance of certificate of registration

- A registered person shall issue credit note, where invoice has been issued and

lTaxable Value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply; or

lWhere good supplied are returned by the recipient; or

lWhere goods/services or both supplied are found to be deficient

- A registered person shall issue debit note, where invoice has been issued and Taxable Value or tax charged in that tax invoice is found to be less than the taxable value or tax payable in respect of such supply.

- Name and address of delivery, State and State code, if unregistered, of the recipient

- Serial Number and date of the corresponding tax invoice or the bill of supply as the case may be

- Value of Taxable Supply, rate of tax and the amount of tax credited or as the case may be, debited to the recipient

- Signature (manually or digitally) of supplier

Contents


- Date of issue


- Amount of refund made

- Rate

- Amount of tax paid

- Whether tax is payable under RCM




Document Type:

- Name, address and GSTIN of the Input Service Distributor


- Date

Input Service Distributor (ISD) Invoice

To be Issued by: ISD shall issue ISD invoice or credit note in order to distribute credit

- Name, address and GSTIN of the recipient to whom the credit is distributed

- Amount of the credit distributed

- Signature (manually or digitally)

Contents

Document Type:

- Date and number of the delivery challan

- Name, address and GSTIN of the consigner, if registered

- Name, address and GSTIN or UIN of the consignee, if registered

- HSN code and description of goods

Delivery Challan

To be Issued by: Where goods are transported for the purposes of:

a) supply of liquid gas where the quantity at the time of removal from the place of business of the supplier is not known;

b) transportation of goods for job work;

c) transportation of goods for reasons other than by way of supply (Eg. Inter unit transfer); or

d) such other supplies as may be notified by the Board

- Quantity

- Taxable value

- Tax rate and Tax amount

- Place of supply, in case of inter-State movement, and

- Signature (manually or digitally).

Contents


Document Type:

- Name, address and GSTIN of registered person having same PAN and state code as ISD

Invoice by registered person to ISD

To be Issued by: Registered person having same PAN and state code as ISD shall issue an invoice to transfer credit of common input services to ISD

- Name, address and GSTIN of the supplier of common service and original invoice whose credit is to be transferred to ISD

Contents




- Date

- Name, address and GSTIN of ISD

- Amount of the credit to be transferred

- Signature (manually or digitally)

- The content lists mentioned for each nature of document are requirements

as per the GST Rules and person can include additional details as well in any

suitable format.

- A registered person procuring goods/services from unregistered person shall

issue self invoice on the date of receipt of goods/services or both. Further,

registered person may issue a consolidated invoice for aggregated value at

the end of a month for supplies exceed Rs. 5,000 in a day from any or all the

suppliers.

- In respect of Tax Invoice and Bill of Supply, the following points may be

considered:

l The number of HSN code for goods/services that a class of registered

person shall be required to mention are as follows:

11.2 Other Key Aspects

Tax Invoice

Sr. Annual Turnover in the preceding F.Y. Number of Digits No. of HSN

1 Upto Rs. 1.50 crore Nil

2 more than Rs. 1.50 crore and upto Rs. 5 crore 2

3 more than Rs. 5 crore 4

l In case of export of goods/services, the invoice shall carry an

endorsement “SUPPLY MEANT FOR EXPORT/SUPPLY TO SEZ UNIT

OR SEZ DEVELOPER FOR AUTHORISED OPERATIONS ON PAYMENT

OF INTEGRATED TAX” or “SUPPLY MEANT FOR EXPORT/SUPPLY TO

SEZ UNIT OR SEZ DEVELOPER FOR AUTHORISED OPERATIONS


- In case of advance receipt,

l If the rate of tax is not determinable then the applicable tax rate shall

be taken at 18%

l If the nature of supply is not determinable then the supply shall be

treated as inter-state supply.

- A registered person may issue a consolidated revised invoice for all taxable

supplies made to unregistered recipient during the period beginning with the

effective date of registration till the date of issuance of certificate.

- In the case of inter state supplies where the value of a supply does not

exceed 2.5 lakhs rupees, a consolidated revised invoice may be issued

separately, in respect of all recipients located in a state and who are not

registered.

- Delivery challan shall be issued in triplicate:

a) The original for consignee

Receipt Voucher

Revised Invoice and Credit or Debit Notes

Delivery Challan


UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF

INTEGRATED TAX” and shall also contain the name of country of

destination.

l Manner of issuance of invoice:

In case of goods In case of services

Invoice shall be prepared in Triplicate, in the following manner:

a) The original for recipient

b) Duplicate for transporter

c) Triplicate for supplier

Invoice shall be prepared in duplicate, in the following manner:

a) Original for recipient

b) Duplicate for supplier



b) Duplicate for transporter

c) Triplicate for consignor

- Where goods are being transported on delivery challan in lieu of invoice, the

same shall be declared in e-way bill.

- Where the goods being transported are for the purpose of supply to the

recipient but the tax invoice could not be issued at the time of removal of

goods, the supplier shall issue tax invoice after delivery of goods.

- Where the goods are being transported in a semi knocked down or

completely knocked down condition:

(a) the supplier shall issue the complete invoice before dispatch of the

first consignment;

(b) the supplier shall issue a delivery challan for each of the subsequent

consignments, giving reference of the invoice;

(c) each consignment shall be accompanied by copies of the

corresponding delivery challan along with a duly certified copy of the

invoice; and

(d) the original copy of the invoice shall be sent along with the last

consignment.

Rule 138 of the Central Goods and Service Tax Rules, 2017 deals with the E-

Way Bill which was earlier notified to come into effect from 1 February 2018

but later vide Notification No. 11/2018- Central Tax dated 2 February 2018 the

Government has postponed the applicability of E-way bill till the time any

further notification came into force.

11.3 E-way Bill

l Introduction

In the meeting held on 10 March, 2018, the GST Council has recommended

the introduction of e-way bill for inter-State movement of goods across the

country from 1 April 2018. For intra-State movement of goods, e-way bill

system will be introduced with effect from a date to be announced in a

phased manner but not later than 01st June, 2018.

Every registered person causing movement of goods of consignment value

exceeding Rs. 50,000 shall before commencement of such movement

furnish the Information in Part A of Form GST EWB-01 in relation to:

- Supply

- For Reasons other than supply

- Due to inward supply from unregistered person

Further, on voluntarily basis a registered person or the transporter at his

option generate and carry the E-Way Bill even if the value of consignment is

less than Rs. 50,000.

The “consignment value” of goods shall be the value, determined in

accordance with the provisions of CGST Act, 2017, (provisions of valuation)

declared in an invoice, a bill of supply or a delivery challan, as the case may be,

issued in respect of the said consignment and also includes the central tax,

State or Union territory tax, integrated tax and cess charged, if any, in the

document and shall exclude the value of exempt supply of goods where the

invoice is issued in respect of both exempt and taxable supply of goods.

In case of following movements of goods, E-Way Bill is mandatory

irrespective of value of consignment-

- Where goods are sent by a principal located in one State to a job

worker located in any other State, the E-Way Bill shall be generated by

l Applicability

l Mandatory requirement of E-way bill irrespective of consignment value



the principal or the job worker, if registered, irrespective of the value

of the consignment.

- Where handicraft goods are transported from one State to another by

a person who has been exempted from the requirement of obtaining

registration, the E-Way Bill shall be generated by the said person

irrespective of the value of the consignment.

- The Government has notified https:\\ewaybill.nic.in as common

portal for generation of E-way bill.

- In regards to E-Way Bill the following forms are prescribed:

l Generation of E-way bill



Forms Description

EWB-01 E-way bill

EWB-02 Consolidated E-way bill

EWB-03 Verification report

EWB-04 Report of detention

INV-01 Generation of invoice reference number

ENR-01 Application for enrollment under section 35(2)- for unregistered person only

E-way bill form EWB-01 has two components:

(1) Part A – Details of consignor, consignee and goods

(2) Part B – Details of vehicle

Below table is showing the generation of E-way in different situations

Situation

EWB-01

Person furnishing Part-A and B details

Who generates E-way Bill

Form

Registered consigner or consignee

Registered consigner or consignee

Registered consigner or consignee (Conveyance owned or hired or by railway/ air/ vessel)

Situation

EWB-01

Person furnishing Part-A and B details

Who Generate E-way Bill

Form

TransporterRegistered consigner or consignee

When goods are being handed over to transporter (GTA) and the distance between the consignor and transporter is in excess of 50 kms

E-way bill can be generated in following modes-

1. Web- Online based

2. SMS- Through mobile

3. Android application- Through mobile app*

4. API- Site to site integration*

5. Bulk generation- Tool based*

6. Suvidha Provider- Third party based*

(*)At present not available


EWB-01Recipient/ Transporter of goods

Compliance shall be done by recipient as if he is the supplier

Goods moved from unregistered person to registered person and recipient is known at the time of commencement of movement

EWB-01Unregistered person or transporter

Either unregistered person or the transporter at their option

Unregistered person either in own conveyance or hired one/ through transporter


l Validity of E-way bill

E-Way Bill generated shall be valid for the period as mentioned below



Distance Validity Period

Up to 100 km One day

For every 100 km or part One additional Daythereof thereafter

Upto 20 km One day in case of Over Dimensional Cargo

For every 20 km or part One additional day in case of Over thereof thereafter Dimensional Cargo

The expression “Over Dimensional Cargo” shall mean a cargo carried as a

single indivisible unit and which exceeds the dimensional limits prescribed in

rule 93 of the Central Motor Vehicle Rules, 1989, made under the Motor

Vehicles Act, 1988.

- In cases where goods are either not transported or are not

transported as per the details furnished in the E-Way Bill, the E-Way

Bill may be cancelled within 24 hours subject to the condition that it

has not been verified in transit.

- If validity of E-Way Bill expires, the goods are not supposed to be

moved. However under circumstances of ‘exceptional nature’, the

transporter may generate another E-Way Bill after updating details in

Part –B. Also the Commissioner can extend the validity period of E-

Way Bill for certain categories of goods as notified in the notification.

- The details of E-Way Bill shall be made available to the registered

recipient online who shall communicate his acceptance or rejection of

the consignment covered by the E-Way Bill. In case of no action has

been taken within 72 hours, it shall be deemed to be accepted.

- In case of goods as specified in annexure of Rule 138 of CGST Rule,

l Cancellation of E-way bill

l No E-way bill required

2017 such as Jewellery, goldsmiths, silversmiths ware, other articles

(chapter 71), currency, used personal and household effects, etc.

- Where goods are transported by non-motorised conveyance.

- Where goods are transported from port /airport / air cargo complex /

land customs station to inland container depot / container freight

station for customs clearance.

- In case of transport of goods, other than de-oiled cake specified in

Schedule appended to Notification No. 2/2017- Central Tax (Rate)

dated 28 June 2018, as amended time to time. (Exempted goods)

- In case of transport of alcoholic liquor for human consumption,

petroleum crude, high speed diesel, motor spirit (Petrol), natural gas or

aviation turbine fuel.

- In case of transport of goods being treated no supply under schedule

III of Central GST Act, 2017.

- Where the goods are being transported upto a distance of twenty

kilometers from the place of the business of the consignor to a

weighbridge for weighment or from the weighbridge back to the place

of the business of the said consignor subject to the condition that the

movement of goods is accompanied by a delivery challan.

- Where the consignor of goods is the Central Government,

Government of any State or a local authority for transport of goods by

rail.

- Where empty cargo containers are being transported.

- Consignment value, for the purpose of E-way bill, must be computed

inclusive of taxes to determine the threshold limit of Rs. 50,000.

- The generator of the E-Way Bill can cancel it within 24 hours.

- Validity of the E-Way Bill shall depend on the distance of the goods

l Other important points





being transported, the validity is one day upto 100 kms and for every

100 kms or part thereof it is one additional day. and shall starts from

the time of first entry of Part B (Vehicle Details) and not from the time

of generation of E-Way Bill.

- Movement of goods from place of consignor to place of transporter

up to a distance of 50km (increased from 10 km) does not require

filling of PART- B of e-way bill. They have to generate PART A of e-

way bill.

- The person in-charge of conveyance shall carry copy of

invoice/bill/challan and copy of E-Way Bill or E-Way Bill Number.

- In case E-Way Bill is not issued, wherever required, in accordance with

the provisions contains in Rule – 138 of CGST Rules, 2017 then taxable

person shall be liable to a penalty of Rs. 10,000 or tax sought to be

evaded (whichever is higher).

- at present there is no requirement to generate e-way bill where an

individual consignment value is less than Rs. 50,000, even if the

transporter is carrying goods of more than Rs. 50,000 in a single

conveyance as per the press release regarding e-way bill released on

10 March 2018.

- Value of exempted goods has been excluded from value of the

consignment, for the purpose of e-way bill generation.

- Public conveyance has also been included as a mode of transport and

the responsibility of generating e-way bill in case of movement of

goods by public transport would be that of the consignor or

consignee.

- Validity of one day will expire at midnight of the day immediately

following the date of generation of e-way bill.

- In case of movement of goods by railways, airways and waterways,

the e-way bill can be generated even after commencement of

movement of goods.

Chapter 12 Refunds

12.1 Refunds

Under the GST regime, in recent times, obtaining refunds has been an area of

concern for several businesses. Not obtaining refund can have severe impact on the

working capital and cash flows of the companies and thus in this section we have

analysed the provisions relating to obtaining refunds under GST Regime. This

section does not cover refunds arising out of transition to GST as these refunds are

generally governed by the provisions of the prior indirect tax laws.

Any person claiming refund of any tax and interest, if any, paid on such tax or any

other amount paid by him, needs to make an application before the jurisdictional

officer before the expiry of 2 years from the relevant date. Refund can be claimed in

respect of the following options:

n Refund of unutilized ITC

Refund of unutilized ITC shall be allowed in respect of –

- Zero rated supply without payment of tax (under bond or letter of

undertaking) except in case where export duty is payable;

- Where credit has been accumulated on account of rate of tax on

inputs being higher than the rate of taxes on outputs

n Refund in case of zero rated supply

- The calculation of refund of ITC in respect of zero rated supply without

payment of tax under bond or letter undertaking is as follows:

Refund Amount = (Turnover of zero rated supply of goods +Turnover

of zero rated supply of services* Net ITC)

Adjusted Total Turnover

Refund Amount-= Maximum Refund that is admissible

Net ITC = ITC availed on inputs and input services during the relevant

period other than ITC availed for which refund is claimed


Turnover of Zero Rated Supply of Goods= value of zero-rated supply

of goods made during the relevant period without payment of tax

under bond or letter of undertaking, other than the turnover of

supplies in respect of which refund is

claimed under sub-rules (4A) or (4B) or both;

Turnover of zero-rated supply of services" means the value of zero-

rated supply of services made without payment of tax under bond or

letter of undertaking

Adjusted Total Turnover = turnover in a State or Union territory

excluding the value of exempt supplies other than zero rated supplies

and turnover of supplies in respect of which refund is claimed

- In case of zero rated supply, refund shall be granted on provisional

basis i.e. refund of 90% of the total amount claimed within a period not

exceeding seven days from the date of acknowledgment , subject to

following conditions:

l Person claiming refund has, during any period of 5 years

immediately preceeding the tax period to which the claim of

refund relates , not been prosecuted for any offence under the

act or under existing law where the amount of tax evades

exceeds Rs. 2.5 lakhs.

l A person making zero rated supply also has an option of

payment of IGST and thereafter claiming refund of IGST paid.

l In case of export of goods, refund application shall be filed only

after the export manifest or export report is provided by the

Customs Authorities.

l Refund of ITC is not allowed in case supplier avails drawback.

- Refund in case of Inverted Duty Structure

l Inverted duty structure means situation where the tax on input

Chapter 12 Refunds


is more than tax on output.

l The calculation of refund of ITC in respect of Inverted Duty

Structure shall be as per the manner specified below:

Maximum refund amount = {(Turnover of inverted rated supply

of Goods and Services) x Net ITC ÷ Adjusted Total Turnover} –

tax payable on such inverted rated supply of Goods and

Services.

*No Refund if output tax is nil or Exempt

*No Refund in certain cases, even if ITC more than tax paid.

- Refund to Casual Taxable Person / Non Resident Taxable person

Casual Taxable Person or Non Resident Indian shall claim refund in the

last return for the amount deposited in advance at the time of

registration after adjustment of tax liability.

Doctrine of Unjust Enrichment in case of Refund of GST.

Unjust enrichment- A benefit obtained from another, not intended as

a gift and not legally justifiable, for which the beneficiary must make

restitution or recompose- Indian Council for Enviro-Legal Action v. UOI (2011) 8 SCC 161.

If the supplier of goods & services has recovered GST from recipient, it

is clear that he has passed on the burden to the recipient and has

already recovered GST from him, In such cases, refund of excess GST

paid will amount to excess and undeserved profit to supplier of goods

and services. It will not be equitable to refund the duty to him, as he

will get double benefit- first from recipient of goods and services and

again from the government

Chapter 12 Refunds


12.2 Relevant date for Refunds

Relevant date for calculating time limit for filing refund claim is as follows:

Chapter 12 Refunds

Situation

Goods are exported by sea or air

Goods are exported by land

Goods are exported by post

Goods regarded as deemed export

Services exported and supply of

services had been completed prior

to the receipt of payment

Services exported, and payment

received in advance prior to date of

issue of invoice

Tax refundable as a consequence of

judgment, decree, order or direction

of the Appellate Authority,

Appellate Tribunal or any court

Unutilized input tax credit

Tax paid on provisional basis

For person, other than supplier

In other cases

Relevant Date

Date on which the ship/aircraft in which

such goods are loaded, leaves India

Date on which such goods pass the frontier

Date of dispatch of goods by the Post Office

Date on which the return relating to such

deemed export is filed

Date of receipt of payment in convertible

foreign exchange

Date of issue of invoice

Date of communication of such judgement,

decree, order or direction

End of FY in which such claim for refund

arises

Date of adjustment of tax after the final

assessment

The date of receipt of goods/services by

such person

Date of payment of tax


12.3 Types of Refund

Chapter 12 Refunds

Types

1. Export of Goods on

payment of IGST

Particular’s

a) No separate application is required as shipping

bill itself reported in GST return will be treated as

application for refund.

b) The system designated by the Customs shall

process the claim for refund and an amount

equal to the integrated tax paid in respect of

such export shall be electronically credited to

the bank account of the applicant.

2. Export of Goods to SEZ

on payment of IGST or

export of services (with

payment or without

payment)

a) The application for refund of integrated tax paid

is required to be filed in FORM GST RFD-01A

(Manual) by the supplier on the common portal.

b) The said online application along with the

necessary documents and declarations would

need to be submitted to the tax authorities.

3. Refund of unutilized

accumulated ITC due to

Zero rated supply

(supplies made to SEZ

and Export of goods or

services without

payment of IGST made

under bond/ LUT).

a) FORM GST RFD-01A needs to be filed

electronically (online) on the common portal.

b) The amount of credit claimed as refund would

be debited from the electronic credit ledger and

ARN (ARN- Acknowledgement Receipt

Number) shall be generated on common portal.

c) The said online application along with the

necessary documents and declarations would

need to be submitted to the tax authorities.

12.4 Other key provisions relating to Refunds

- No refund shall be granted for the amount less than Rs. 1,000

- If the amount of refund claim is less than Rs. 2 Lakhs, there is no need of furnishing documentary evidence instead a self-declaration based on the documentary and other evidence by the applicant certifying that he has not


passed on the incidence of such tax and interest is sufficient to claim refund.

- No refund, other than export, shall be allowed in case of Unjust Enrichment.

- Refund order shall be sanctioned within 60 days from the date of receipt of complete application. In case amount is not refunded within 60 days then interest shall be payable after the expiry of 60 days till the date of refund.

- If any person has defaulted in furnishing return or payment of tax, interest or penalty, the officer may withhold the payment of refund or may deduct such tax, interest or penalty which remains unpaid from the refund claim.

- The payment of the sanctioned refund amount in relation to CT / IT / Cess shall be made by the Central tax authority while payment of the sanctioned refund amount in relation to ST / UT would be made by the State tax/Union territory tax authority.

- The refund application for various taxes i.e. Central Tax (CT) / State Tax (ST) / Union Tax (UT) / Integrated Tax (IT)/ Cess can be filed with any one of the tax authorities.

- After the detailed scrutiny of refund application along with submitted documents, proper officer will make an refund order in Form RFD-06.

Chapter 12 Refunds


Chapter 13 Records and Audit Related Provisions

13.1 General Provisions

- Every registered person shall keep and maintain at his principal place of

business the following true and correct accounts:

l Production/manufacture of goods;

l Inward and outward supplies;

l Stock of goods;

l ITC availed;

l Details of output tax and

l Such other particulars as may be prescribed.

- In case of additional place of business, accounts relating to such additional

places shall be kept at each such additional place.

- The books of accounts or other records shall be retained for a period of 72

months from the last day of filing of the annual return.

- The Commissioner may notify a class of taxable persons to maintain

additional accounts or documents.

- Every transporter and owner/ operator (registered or not) of warehouse/

godown or any other place used for storage of goods shall maintain records

of consigner, consignee and other details of goods.

- Registered person who fails to record supplies other than goods

lost/stolen/destroyed/written of/disposed of by way of gift/free sample,

then in such cases the officers shall calculate tax payable on such supplies.

- Records pertaining to appeals, revision, proceedings or investigation shall be

kept for a period of 1 year after final disposal.




13.2 Audit by Chartered Accountant / Cost Accountant

13.3 Audit by Tax Authorities

13.4 Special Audit

Every registered person whose turnover during a Financial Year exceeds Rs. 2 Crore

shall get his accounts audited by a Chartered Accountant or a Cost Accountant on or

before 31 December of following the end of the Financial Year and submit a copy of

audited financial accounts, the reconciliation statement and other documents.

- The Commissioner or any officer authorized, by way of a general/specific

order may undertake audit of any registered person. The registered person

shall be informed not less than 15 working days prior to conduct of audit.

- The audit shall be completed within 3 months from the date of

commencement of audit and may be extended by a further period of 6

months.

- The audit findings shall be communicated to the registered person within 30

days from completion of the audit.

- Assistant Commissioner with prior approval of Commissioner, may / can

direct any registered person by notice in writing to get his accounts audited

by a CA/CWA.

- During any inquiry, scrutiny, investigation, any officer not below the rank of

Assistant Commissioner, having regard to the nature and complexity of the

case and the interest of the Revenue, is of the opinion that the value has not

been correctly declared or the credit availed is not within the normal limits,

he may, with the prior approval of the Commissioner, direct such registered

person by a communication in writing to get his records including books of

account examined and audited by a CA or CWA as may be nominated by the

Commissioner.

- The CA or CWA so nominated shall, within the period of 90 days, submit a

report of such audit duly signed and certified by him to the said

Commissioner.

- The registered person shall be given an opportunity of being heard.

- The expenses of the examination and audit of records, including the

remuneration of such chartered accountant or cost accountant, shall be

determined and paid by the Commissioner and such determination shall be

final.

- Where the special audit conducted results in detection of tax not paid or

short paid or erroneously refunded, or input tax credit wrongly availed or

utilised, the proper officer may initiate recovery of such dues.



14.1 Anti-Profiteering Measure under GST

- The GST regime proposes to bring in a price control mechanism to ensure

that ITC availed by any registered person or the reduction in price on account

of any reduction in the tax rate under GST have actually resulted in a

commensurate reduction in the price of the goods/services.

- Countries like Malaysia, New Zealand and Canada, have witnessed a

significant increase in inflation for a short period post implementation of GST.

GST being a multi-stage, consumption-based value added tax proposes to

abolish the cascading effect which was prevelant in the previous tax

structure. Such change provides room to improve profit margins at every

stage of the value chain . Therefore anti-profiteering clause is proposed to

ensure that the benefits of an efficient tax system are passed on to the

consumers.

- The Government on recommendations of the Council, may propose to

constitute an authority or entrust an existing authority to exercise powers

and functions and impose penalty where it finds that the price has not been

reduced on account of additional ITC or reduced tax rate under GST regime.

- The authority shall have the duty to:

l determine whether any reduction in the rate of tax on any supply of

goods or services or the benefit of input tax credit has been passed

on to the recipient by way of commensurate reduction in prices;

l identify the registered person who has not passed on the benefit of

reduction in the rate of tax on supply of goods or services or the

benefit of input tax credit to the recipient by way of commensurate

reduction in prices;

l order:-

n reduction in prices;

n return to the recipient, an amount equivalent to the amount not

Chapter 14 Anti-Profiteering Measure



passed by way of commensurate reduction in prices along with

interest at the rate of 18% from the date of collection of higher

amount till the date of return of such amount; or recovery of

amount not returned in case the eligible person does not claim

refund return of the amount or is not identifiable, and

depositing the same in the consumer welfare fund;

n imposition of penalty;

n cancellation of registration

- The Authority shall cease to exist after expiry of 2 years from the date on

which the Chairman of the Authority enters upon his office unless the

Council recommends otherwise.

- As per press release dated 15 June 2017, the builders and construction

companies are expected to pass the benefit of lower tax burden under GST

to buyers of property by way of reduced prices/installments. In under

construction flats they should not ask customers to pay higher tax on

installments to be received after imposition of GST.

Procedure to be followed by a Consumer to file an application against the

seller for profiteering is tabulated on the next page.



Application by Consumer

State Screening CommitteeConfirm prima facie evidence

of profiterring

Standing CommitteeConfirm prima facie evidence

of profiterring

Director General of safeguards, CBECFor investigating profiterring

National Anti-profiteering AuthorityFor determining profiteering and passing appropriate

order to ensure consumers benefit from reduced prices

Affected consumers may file an application, in the prescribed format,before the

Standing Committee on Anti-profiteering (ifthe profiteering has all-India character)

Or before the respective State Screening Committees (if the profiteering is of local

nature).

Under the GST law, the mechanism and extent to which the anti-profiteering

guidelines shall be enforced is not yet prescribed. Clarity is awaited on how the

benefit is to be passed on to consumers, i.e. whether the same is to be passed on by

way of reduction of product and service prices, whether the same can be passed on

by way of discounts or whether the benefit needs to be passed on at an

organizational level. It is strongly suggested that companies may start planning and

devise a mechanism for understanding the costing of its products and identify the

manner in which the benefits, if any, may be passed on to the final consumers. It

may also be prudent on the part of the taxpayers to identify whether upstream

participants in the value chain have passed on the benefit of GST to them and

taxpayers may have to negotiate with their vendors and relook at the agreements.

14.2 Open Issues in Relation to Anti Profiteering


Section IV GST AND SUPPLY CHAIN

Chapter 15 GST and Supply Chain

Due to the cascading effect of previous indirect tax regime, India’s supply chain for the

past so many years has been highly inefficient. The past reforms of the government

almost exclusively focused on manufacturing and little was done to improve core aspects

of supply chain such as procurement, logistics, warehousing network and removing market

inefficiencies

GST is meant to simplify the goods movement across value chain for consumer as well as

industrial products, through a smooth baton change at each stage from source to end

customer. Supply chains for individual players as well as industry sectors will experience

significant impact through the implementation of GST. The most important impact is

removal of state boundaries for applicability of different taxes and levies. India has become

a single market post GST implementation, through subsumed taxes & levies existent in the

pre-GST era. This has resulted in opportunity to re-visit the entire supply chain – inbound

as well as outbound and to explore opportunities for efficient and cost-effective supply

chains.

Supply chain is a very important aspect. To breakdown supply chain into simple

terms, we have divided a company’s supply chain into four pivotal aspects. These

are:

1. Procurement: Procurement is an important function of the company’s

supply chain. A company’s products are as good as the raw materials that

they use. Procurement in simple terms refers to the decisions that

companies make to identify and onboard vendors and also, the raw materials

that companies use. Under GST, this aspect is expected to undergo a shift.

Some of the opportunity areas under procurement that arise as a result of

GST are:

a. Broad-basing and relooking at Sourcing Strategy & Supplier footprint:

Selection of supplier based on merit, business requirement and cost,

rather than tax considerations, increasing vendor pool due to access

to vendors outside the state. One may also relook at make vs buy and

import vs local decisions.

15.1 Concept of Supply Chain



b. Lean Concepts in Sourcing: Consolidation, primary / secondary

logistics simplification, removal of un-necessary supplier warehouses

located to avoid CST / other levies and elimination of stock transfer

which were adding to hidden costs

c. Outsourcing strategy: Availability of ITC on input services against

liability arising out of supply of goods may result in organizations

outsourcing certain non-critical aspects of business.

d. Contracts Re-negotiations – Availing the benefits of GST input tax

credits, subsumed taxes from vendor and the entire inbound value

chain, ensure GST registration and receipt of input tax credits for all

goods and services from the vendor. Ensuring vendor has passed on

all the benefits.

2. Manufacturing: Manufacturing is the transformation of raw materials into

finished products. Some key areas that may be considered under

manufacturing leg of supply chain are

a. Re-design of Manufacturing Footprint: Re-designing / consolidation

of manufacturing based on customer needs than the taxation

benefits

b. Multi-stage manufacturing: Postponement / delay of certain

manufacturing operations to cater to the customer needs rather than

consolidated operations to avail tax benefits.

c. Re-design of Manufacturing processes – such as sub-contracting,

job-work operations etc.

3. Network design and optimization: In this context, network refers to the

location of the warehouses and production and storage facilities (eg. Depots)

of the company. Decision on location of warehouses is important as the

company operating in India must be able to effectively meet the demands of

its customers located in several states. Under the previous indirect tax

regime, fiscal costs and area-based exemptions weighed in on a company’s


decision to design its network in India. Many companies located their

operations in states like Himachal Pradesh and Sikkim to take benefits of the

exemptions enjoyed by these regions. Under GST, it is expected that these

area-based exemptions would be minimized. Presently, with the

implementation of GST, many state governments are in lieu of the area-

based exemptions, announcing a scheme of budgetary support. This is done

to ensure that businesses that were enjoying exemptions are not suddenly

disrupted as a result of GST. The withdrawal of area-based exemptions and

availability of input tax credit of IGST paid on inter-state procurement provide

opportunities for companies to optimize their warehousing footprint.

Companies may now look at employing a hub and spoke model of

warehousing and are able to design warehousing networks that are

responsive i.e. able to meet customer needs in a time bound and cost-

effective manner. Companies can now locate warehouses on considerations

such as service levels, logistics cost, customer concentration, cost of real

estate etc. rather than looking at just the tax aspects. One may also look at

leasing of warehouse space rather than ownership as the input tax paid on

lease rentals may be available for set-off against the output tax liability of

the states in which the warehouses are located.

4. Outbound logistics: The last leg of the supply chain is the outbound logistics.

Outbound logistics typically is concerned with the speed with which an

organization delivers its products to the end customers. With the

implementation of e-way bills, which is the new compliance under GST

regime, there is an opportunity to enforce mechanism for tracking parcels

and movement of goods. Data analytics on such movements and on parcel

tracking may prove to be very valuable for companies and may bring about

significant reduction in sales and distribution overheads, especially freight

and transportation costs and at the same time improve customer

responsiveness. Some key strategies that may be considered to improve

outbound logistics are:

a. Optimization of distribution infrastructure (numbers and location): To

move away from state wise network, this design has other



advantages like primary logistics efficiency, warehousing operations

efficiency, overall inventory reduction, etc.

b. Re-definition of supply areas: Flow path would be designed based on

the market / customer need as well as quality & cost of supply. This

enables optimization of potential supply areas which were avoided

because of regulatory limitations.

c. Re-designing processes: Removal of stock transfer / return

processes, which were of no value addition with efficient processes to

avail business benefits, registration in operating states to avail GST

benefits, etc.

We observed that business organizations have responded to this breakthrough tax

transformation differently. While some organizations have played it conservative

and safe, some others have taken some pro-active steps to gain pioneering

advantages in leveraging the tax reform. We categorize them into three distinct

types, as given below:

1. Compliance: The organizations , which have taken necessary steps before /

after GST implementation to ensure compliance to the changes in law for self,

vendors and distribution channel. They have changed their systems and

processes, legal documentation, standards and procedures as per the

requirement of GST. This enabled risk prevention from any additional liabilities

against non-compliance. This may result in marginally negative impact on

business, since some benefits may not be availed.

2. Status-Quo: These organizations not only complied to the GST laws and

respective system and process & procedural changes but also ensured that

there is nil or negligible impact on their business due to the change. They

ensured that input tax credits, where applicable are availed, due registration

of all channel partners and other preliminary steps to prevent any negative

impact on their business due to GST.

15.2 Response to GST by different Organizations



3. Being Proactive: The power of GST implementation through out the value

chain and the benefits of single market through out the country was realized

by some players who took proactive steps to get the supply chain simplified

and value chain losses reduced. These players proactively looked at GST to

leverage business advantage through tax credits in the inbound value chain,

re-visiting the inbound and manufacturing foot-print as well as re-designing

the outbound supply chains. The guiding principle for designing the supply

chain was not the regulatory framework, but markets, customer needs,

product quality, raw material availability and quality & supply chain costs.

These players would gain competitive advantage through positive impact on

the business through their actions post GST implementation.



Section V LITIGATION UNDER THE GST LAW

Chapter 16 Advance Ruling

16.1 Object of Advance Ruling

16.2 Questions eligible for advance ruling

16.3 Procedure for advance ruling

Advance ruling plays a significant role in reducing future litigations by seeking

decision from Authority of Advance Ruling (AAR) in advance at the time of doing

transaction itself. Advance rulings may be a great mechanism to seek clarity on

contentious issues but the process for obtaining advance rulings must be

undertaken with caution. In this section, we attempt to analyse the provisions

related to advance rulings under the GST regime.

The questions on which the advance ruling can be sought from AAR shall be in

respect of:

a) Classification of any goods / services;

b) Applicability of a notification;

c) Determination of time and value of supply of goods / services;

d) Admissibility of input tax credit of tax paid or deemed to have been paid;

e) Determination of the liability to pay tax on any goods / services;

f) Whether applicant is required to be registered;

g) Whether any particular thing done by the applicant with respect to any

goods / services amounts to or results in a supply of goods / services, within

the meaning of that term.

- An application in form GST ARA-1 along with a fee of Rs. 5,000 for obtaining

advance ruling shall be made on common portal.

- The authority on receipt of application shall forward a copy of such

application to the concerned officer and may call to furnish relevant records.

- The authority after examining the application and after hearing the applicant

or his authorised representative may either admit or reject the application.



However, no application shall be rejected unless an opportunity of hearing

has been given to applicant.

- Where an application is admitted, the authority after examining records made

available and providing an opportunity of hearing to applicant shall pronounce

its advance ruling.

- Where the members of AAR differ on any views in respect of any question

on which advance ruling is sought, the matter to be referred to Appellate

AAR.

- The AAR shall pronounce its advance ruling in writing within 90 days from the

date of receipt of application.

- Where the department or applicant is aggrieved by the order of AAR, the

appeal can be filed before appellate AAR within 30 days from the date of

communication of order:

a) By the applicant in form GST ARA-2 along with fees of Rs. 10,000.

b) By the concerned officer or the jurisdictional officer in form GST ARA-

3 without any fees.

- Where the members of the Appellate AAR also differ on any views in respect

of any point, it shall be deemed that no advance ruling can be issued in

respect of such question.

- The Appellate AAR shall pronounce its advance ruling in writing within 90

days from the date of filing of appeal.

- The AAR or Appellate AAR may amend any order passed by it, either if error

is noticed by him or is brought to the notice by applicant or any member of

authority.

The advance ruling pronounced by the AAR or Appellate AAR shall be binding only

on the person who had sought the advance ruling.

16.4 Binding



16.5 Key Advance Ruling

In this section, we are analyzing some of the major advance rulings that have taken

place in the GST regime. We feel these rulings may serve as a precursor of the

intention of the legislature and may turn out to be landmark judgements in the GST

regime.


Global Reach Education Services Pvt. Ltd.

Background:

Application:

Ruling:

The applicant is promoting courses of foreign universities among prospective students and receiving consideration in the form of commission, based on performance in recruiting students, in convertible foreign exchange. Applicant, therefore, represents the University in the territory of India and acts as its recruitment agent.

The applicant seeks to determine whether the services provided by it can be categorized as an export of services.

Held that the said services are not an export of service and are liable to tax.

Switching Avo Electro Power Ltd.

Background:

Application:

Ruling:

Applicant is a supplier of power solutions, including UPS, servo stabilizer, batteries etc.

More specifically, they want a ruling on supplies of battery along with UPS can be treated as Composite Supply within the meaning of Section 2(30) of the CGST Act, 2017.

Supply of battery with UPS was held to be a mixed supply.

Caltech Polymers Pvt. Ltd.

Background:

Application:

Ruling:

The applicant is providing canteen services exclusively for their employees. They are incurring the canteen running expenses and are recovering the same from its employees without any profit margin.

Whether recovery of food expenses from employees for the canteen provided by company comes under the definition of outward supplies and are taxable under GST Act?

It is held that recovery of food expenses from the employees for the canteen services provided by company would be taxable as a supply of service under GST.

Chapter 17 Interest and Penalties under the GST law

17.1 Interest

17.2 When penalties may be imposed

- Every person, who is liable to pay tax but fails to pay within prescribed period,

shall pay interest at the rate of 18% p.a.

- Interest shall be calculated from the succeeding day on which tax was due till

the day tax is actually paid to Government.

- A taxable person who makes

(a) an undue or excess claim of input tax credit or

(b) an undue or excess reduction in output tax liability

shall pay interest at the rate of 24% p.a. on such excess or undue claim or

reduction.

Following are the illustrative and not exhaustive list of contravention which attract

penalty:


Sr. No. Contraventions

1 Non-payment or short payment of tax

2 Wrong availment or utilization of input tax credit

3 Fails to keep or maintain books of accounts and other documents under GST law

4 Takes or utilise input tax credit without actual receipt of goods or services

5 Fraudulently obtains refund of tax

6 Liable for registration but fails to obtain registration

7 Transports any taxable goods without cover of document prescribed under GST law

17.3 Quantum of penalties

- Any registered person who has not paid or short paid tax or erroneously


refunded or wrongly availed or utilised input tax credit, shall be liable for

following penalty-


For any reason, other than fraud,

willful-misstatement or

suppression of facts to evade tax

For any reason of fraud,

willful-misstatement or

suppression of facts to evade tax

Rs.10,000/-

or

100% of tax due,

Whichever is higher

Rs.10,000/-

or

10% of tax due,

Whichever is higher

- In case of following contraventions, person shall be liable for penalty of

(a) Rs.10,000/-

(b) An amount equal to tax evaded

(c) The tax not deducted under section 51 or short deducted or deducted

but not paid to Government

(d) Tax not collected under section 52 or short collected or collected but

not paid to the Government

(e) Input tax credit availed of or passed on or distributed irregularly

(f) Refund claimed fraudulently,

whichever, is higher.


1 Made supply without issue of any invoice or issues an incorrect or false invoice

2 Issues any invoice or bill without supply

3 Collects any tax but fails to pay the same to the Government beyond a period of 3 months from the due date of payment



4 Collects any tax in contravention of the provisions of this Act but fails to pay to the Government beyond a period of 3 months from the due date of payment

5 Fails to deduct the tax under section 51 or short deducted or deducted but fails to pay to the Government

6 Fails to collect the tax under section 52 or short collected or collected but fails to pay to the Government

7 Takes or utilises input tax credit without actual receipt of goods or services or both

8 Fraudulently obtains refund of tax

9 Takes or distributes input tax credit in contravention of section 20, or the rules made thereunder

10 Falsifies or substitutes financial records or produces fake accounts or documents or furnishes any false information or return with an intention to evade payment of tax

11 Liable to be registered but fails to obtain registration

12 Furnishes any false information with regard to registration

13 Obstructs or prevents any officer in discharge of his duties under this Act

14 Transports any taxable goods without the cover of prescribed documents

15 Suppresses his turnover leading to evasion of tax

16 Fails to keep, maintain or retain books of account and other documents required under GST law

17 Fails to furnish information or documents called for by an officer or furnishes false information or documents during any proceedings

18 Supplies, transports or stores any goods which he has reasons to believe are liable to confiscation

19 Issues any invoice or document by using GSTIN of another person

20 Tampers with, or destroys any material evidence or document

21 Disposes off or tampers with any goods that have been detained, seized, or attached

- Where contraventions are of following nature then the quantum of penalty

may extend to Rs. 25,000




Sr. No. Nature of contravention

1 A person who aids or abets any of the above mentioned contraventions

2 A person who acquires possession of, or concerns himself in transporting, removing, depositing, keeping, concealing, supplying, or purchasing of any goods which he knows or has reasons to believe are liable to confiscation.

3 A person who receives or is concerned with the supply of services which he knows or has reasons to believe are in contravention of provisions of GST law.

4 A person who fails to appear before the officer of central tax, when issued with a summon for appearance to give evidence or produce a document in an inquiry.

5 A person who fails to issue invoice or fails to account for an invoice in his books of account.

- General penalty

Where a person contravene any provisions of the GST law for which no

separate penalty has been provided, he shall be liable for penalty which may

extend to Rs. 25,000.

Chapter 18 Litigation under GST

Tax law recognises that on any given set of facts and laws, there can be different opinions

or viewpoints. Hence, it is likely that the taxpayer may not agree with the “adjudication

order” so passed by the tax officer. It is equally possible that the Department may itself not

be in agreement with the adjudication order in some cases. It is for this reason that the

statute provides further channels of appeal, to both sides. The litigation procedure under

GST Law has been depicted in the below chart:


The litigation procedure under GST law has been depicted in the flowchart on the next

page.

Adjudicating Authority issues Show Cause Notice (SCN) At least 3/6 months before expiry of time limit to pass an order

Reply to SCN (Representations)

Pass an order

Yes

Yes

Person aggrieved by order

Pass an order confirming, modifying or annulling Adjudicating authority's order

Yes

Person aggrieved by AA order

File Appeal before CESTAT

Within 3/5 years from due date of annual return

NoMatter

concluded{ }Within 3 months from the date ofcommunication of order

Within 1 year from date of filing appeal

NoMatter

concluded{ }

Matter concluded{ }

Matter concluded{ }

Matter concluded{ }

Counterparty to file Memorandumof Cross Objection

Within 3 months from the date of communication of order

Opportunity of being heard is provided

Within 45 days of receipt of notice File Appeal before

Hight Court (HC)Within 180 days from thedate of CESTAT order

HC passes order/ Judgement

If HC in its judgement certifies to be afit one, for appeal to Supreme Court

File appeal before Supreme Court

Pass an order confirming, modifying or annulling CESTAT order or may refer back case to original adjudicating authority

Person aggrieved by CESTAT order

+Involves substantial question of law

No

File appeal before Appellate Authority (AA)

Opportunity of being heard is provided

Within 1 year from date appeal is filed

Chapter 18

Litigation under GST

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ST - A

Leap Forward

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Chapter 19 Case Laws

Introduction

Since India is a common law country, much of the intention of the legislature needs to be

analyzed from the pronouncements made by various judicial forums. As GST is an evolving

law, in this section, we look at some selected significant judgements that would help to

explain the intention of the government. The select significant judicial decisions in GST

reported during the year are summarized and compiled in this edition of the publication.


Samaj Parivartana Samudaya Vs State of Karnataka

Forum

Brief Issue:

Outcome:

Supreme Court

The entity purchased mineral sold by the State in an e-auction. The minerals were then leased to another entity. When the revenue sought to impose GST duty on the sale value of the mineral purchased in the e-auction, the issue arose as to who between the purchaser of the minerals and the lessee would pay the tax.

The buyer of the minerals is liable to pay GST directly to the lessee. The lessee would further be responsible for ensuring all compliances.

UoI Vs Mohit Mineral Pvt. Ltd.

Forum

Brief Issue:

Outcome:

Delhi High Court and Supreme Court

Petitioner had challenged the constitutional validity of Goods and Services Tax (Compensation to States) Act, 2017. Matter was taken before Delhi High Court, upheld in favour of asseessee and thereafter appealed by Revenue.

High Court had observed that the additional levy on the stocks of coal on which Clean Energy Cess has already been paid in terms of Finance Act, 2010, assessee would not be requiring the appellant to make any further payment. However, tax payment on stocks of coal on which no Clean Energy Cess under the FA, 2010 was paid, would be subject to the result of this petition. Moreover, it was clarified clarified that the assessee would be entitled to a refund of amounts of Clean Energy Cess already paid. Impugned order has been stayed by the Supreme Court.



Abicor and Binzel Technoweld Pvt. Ltd. Vs UoI

Forum

Brief Issue:

Outcome:

High Court

Returns filed by the electronic mode are not generated on the website of the Department, and thus were not accepted.

Even if the returns are forwarded belatedly, assessee cannot be refused for forwarding these returns after the prescribed period as the assessee is aware that he would be liable to pay tax liability and the component of interest and penalty may also be added due to such delay.

D. Pauls Travel & Tours Ltd. Vs Union of India

Forum

Brief Issue:

Outcome:

High Court

Petitioner submits that it is in the business of booking tours and hotel packages for customers and charge IGST from customers for bookings in hotels located outside Delhi. However, they are unable to avail input tax credit on the SGST charged by the hotels located outside Delhi since they are not registered in those States. Petitioner submits that as per the stand of the respondents, the petitioner and other assesses would have to be registered in all States and Union Territories to avail input credit of SGST which, according to them, is contrary to the purpose and objective of Goods and Services Tax. Different provisions are applicable in case of online bookings through web travel portals and they are able to avail the credit.

The respondents would examine and consider whether the matter should be placed before the GST Council.

Lupin Ltd Vs UoI

Forum

Brief Issue:

Outcome:

High Court

Input Tax Credit (ITC) on pre-GST stock - stipulation in Section 140(3)(iv) of CGST Act restricting transitional credit up to 1 year. Petitioner is challenging the same.

It is open to the petitioner to claim whatever it wishes to and in the event the credit sought is denied, the respective entitlement of the parties shall be subject to the final decision.


Proactive Plast Pvt Ltd Vs State Of UP

Forum

Brief Issue:

Outcome:

High Court

Petitioner is aggrieved by the seizure of his goods vide impugned order dated 20.01.2018 passed under Section 129(1) of the UP GST Act, 2017 - Petitioner submits that admittedly the seized goods were in transit from outside the State & therefore, Rule 138 of the Rules framed under the U.P.G.S.T. by a notification dated 21.07.2017 making E-Way bill mandatory would apply only in respect of goods in transit within the State of U.P. and not for goods brought from outside the State.

Even if the seizure is treated to be under Section 129(1) of the Central GST, as there was no provision of E-Way bill on the relevant date under the Central GST and, therefore, prima facie the seizure appears to be illegal.

Continental India Pvt Ltd and another Vs UoI

Forum

Brief Issue:

Outcome:

High Court

Petitioner seeks a writ of mandamus directing the GST Council to make recommendations to the State Government to extend the time period for filing of GST TRAN-1 because their application was not entertained on the last date i.e. 27.12.2017 and they have filed complete application for the necessary transitional credit.

Respondents are directed to reopen the portal within two weeks. In the event they do not do so, they will entertain the application of the petitioner manually and pass orders on it after due verification of the credits as claimed by the petitioner. They will also ensure that the petitioner is allowed to pay its taxes on the regular electronic system also which is being maintained, for use of the credit likely to be considered. Petition stands disposed.


Mumbai13th Floor, Bakhtawar229, Nariman PointMumbai - 400 021 3rd Floor, A Wing, Technopolis Knowledge ParkMahakali Caves Road, Andheri (E) Mumbai - 400 093

201, Shree PadminiTeli Galli JunctionAndheri (E), Mumbai - 400 069

New Delhi - NCR2nd Floor, Tower-BB-37, Sector-1Noida - 201 301

ChennaiApex Towers, 2nd Floor, No.54II Main Road, R. A. PuramChennai - 600 028 1A, Chamiers Apartments62/121, Chamiers RoadR. A. Puram, Chennai - 600 028

KolkataA-6, 12th FloorChatterjee International Centre33A, Jawaharlal Nehru Road Kolkata - 700 071

Bengaluru 3rd Floor, B WingJubilee Building, 45, MuseumRoad, Bengaluru - 560 025

SuratDTA-2, G-02 to G-05 PlotGujarat Hira BourseIchhapore-2Surat - 394 510

T-720, Belgium TowerOpp. Linear Bus StopRing Road, Surat - 395 002

B/604-605, Tirupati PlazaAthwa Gate, NanpuraSurat - 395 001

Hyderabad217, Maruthi Corporate Point Swapnalok Complex92, Sarojini Devi Road Secunderabad - 500 003

AhmedabadB-504, Narnarayan Complex NavrangpuraAhmedabad - 380 009

Pune102, 1st FloorShree ResidencyBaner Balewadi RoadBalewadi, Pune - 411 045

GandhidhamDivyasarika, Plot No. 41Ward 10-A, GurukulGandhidham - 370 201 Jaipur346, 3rd FloorGanpati Plaza, M.I. RoadJaipur - 302 001

New Delhi-NCR

Bengaluru

Pune

GandhidhamAhmedabad

Surat

Mumbai

Hyderabad

Chennai

Kolkata

Jaipur

RSM India

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GST is a complex legislation and does have far reaching impacts on businesses, some of which are extremely challenging and disruptive. In this publication we have endeavoured to elucidate in a comprehensive manner the whole gamut of the GST Law in India and the recent developments in the field. Every effort has been made to ensure that the contents are accurate and current. Information in this publication is in no way intended to replace or supersede independent or other professional advice. This publication should not be relied upon for taking actions or decisions without appropriate professional advice and it may be noted that nothing contained in this publication should be regarded as our opinion and facts of each case will need to be analysed based on specific facts. While all reasonable care has been taken in preparation of this publication, we accept no responsibility for any liability arising from any statements or errors contained in this publication. This publication has been prepared based on information available in public domain. We have independently not verified the authenticity of this domain.

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